BGF invests in Aubin

BGF announced a £2.25m investment in Aubin, an oil and gas service sector business.

Established in 1986 and based in Ellon, near Aberdeen, Aubin has for the last 27 years supplied specialist cementing and stimulation chemicals used in drilling and preparing wells for production, with the majority of its chemicals sold into growing markets in the Middle East.

Over the last few years, with access to its own lab and team of chemists, the company has developed two new gel based product lines.  BGF’s £2.25m investment will be used to commercialise these new products, expand the company’s sales and marketing team, invest in on-going R&D and accelerate the next phase of Aubin’s growth.

The first product line, pipeline and pigging gels, are used to treat and clean pipelines where standard products will not work. Many pipelines with changing diameters along their length or sharp bends will not allow standard metal or plastic pigs to pass through them.  Aubin’s gel based pigs conform to the shape of the pipe and can therefore clean pipelines which would otherwise be considered “uncleanable”.

In addition the company has developed a range of gel-based technologies for buoyancy, pipeline insulation and pipeline sealing.  These products are at the point of commercial adoption and are gaining significant traction in the market.

In addition to BGF’s equity investment, Bank of Scotland has provided Aubin with a £500,000 debt facility through the Government’s Funding for Lending scheme. As with BGF’s first oil and gas sector investment in STATS Group, this is indicative of how BGF can work in partnership with banks to help unlock more credit for SMEs like Aubin. Through BGF’s Talent Network, Aubin has also strengthened its senior management team with the appointment of a new Non-Executive Chairman, Graham Philip, currently Deputy Chairman of Ashtead Technology Ltd, and previously  CEO of Vroon (Viking) Offshore Services Ltd. Prior to this, Graham held senior roles within A.P. Moller Group, Wijsmuller Group BV and Ocean Group plc.

Aubin employs 19 people and in 2012 the company generated revenues in excess of £5m which it hopes to grow significantly as its new subsea technologies are adopted by the industry. January of 2013 saw the company generate more than £800,000 in revenue. Aubin is led by Managing Director Paddy Collins, an industrial chemist with over 30 years’ experience in oilfield chemical technology, having worked at TR Oil, Clariant, BJ Services and Schlumberger.

Paddy Collins, Managing Director of Aubin, commented: “I was approached by a number of interested private equity investors but it was very clear from an early stage that BGF was my preferred partner. I’m delighted to have secured this investment and this vote of confidence in me and my team. The additional capital and range of opportunities it will allow give us the freedom to focus on growth, as well as research and development, and should allow Aubin to expand at a pace that we could not otherwise have contemplated.”

Chris Cooper, Relationship Director at Bank of Scotland Commercial, said: “Bank of Scotland’s investment in this successful business is an example of our ambition to help SMEs develop, diversify and grow through asset based financial support.

“Aubin’s focus on subsea development places it at the heart of the industry’s future. The combined experience and success of the team is a great example of the key role independent specialists are playing in Aberdeen’s booming oil and gas sector.”

The advisers to the transaction were Johnston Carmichael, Pinsent Masons, Blackwood Partners and Campbell Dallas.