Management team leads multi-million pound buyout of Proserv –

July 23, 2024

3 minutes read

Aberdeen-headquartered Proserv has completed a buy-out from its private equity owners in a deal backed by a strategic investor who has worked alongside the business for around five years.

The multi-million pound deal is being led by CEO Davis Larssen and CFO Mark Fraser, backed by GIIL, a UK-based investment vehicle of Glenn Inniss, the founder and owner of the London-based GII Finance Group.

The new owners have pledged to introduce an employee ownership scheme for the benefit of its 800-strong global workforce by the end of the year. Of these 335 are based in the UK and 170 across its operations in Westhill and Tullos in the north-east of Scotland.

Proserv has successfully completed a sponsor-backed management buyout Picture shows; Proserv CFO Mark Fraser and CEO Davis Larssen.

The deal marks an exit for shareholders Oaktree Capital Management (NYSE:OAK.PRA) and KKR (NYSE:KKR). Both investors took control of the group in a 2018 restructuring.

The firm did not disclose the value of the transaction or the resulting division of shares although the three now control the business.

New ownership enables the firm to accelerate its five-year growth trajectory and extend its market presence in renewables while continuing to serve its customers across its core business of oil and gas, Proserv said.

The firm remains the only independent provider of subsea controls in the world. It estimates it has around a 50% market share in providing subsea control systems in the North Sea and the Gulf of Mexico.

However, business in the UKCS has been under a “grey cloud” due to uncertainty caused by UK energy policy although it remains confident in the growth of sales globally.

Speaking to Energy Voice, Larssen, who has been with the business for almost 15 years said: “The current position in the North Sea with the uncertainty around the long term perspective there is of concern for us.

“There were a number of projects over the last two years we were confident we would win and they have just not been awarded in that time with the uncertainty.

“That is obviously a bit of grey cloud on the horizon just now. But our control systems get sold and installed all over the world.”

Proserv’s ECG provides real-time analysis with insights through an intuitive user interface.

The firm has also made inroads into the offshore wind sector with the development of its ECG cable monitoring system which has been deployed at Dogger Bank A and B, currently the largest offshore wind farm in the world.

“As offshore wind goes into floating offshore wind, the harsh environment of that infrastructure becomes more akin to an oil and gas environment,” he said.

“The control system becomes the most – in our opinion – the key critical component to make sure that offshore wind development is working effectively, but also gives you access to all of the data to actually tell you what’s happening, and therefore what you can do to improve the performance of that.”

He added: “We have the ability to transition from oil and gas into the renewables energy and offshore wind.

“Not focusing on the big port infrastructure and all the big steel, but the key, core technology that can then create an exportable skill set in the future.

“Our immediate goal now is to build on our strong reputation and strengthen our presence in offshore wind where there is a growing appetite for OEM-agnostic warrantied controls technologies for safe and reliable wind farm operations.”

Proserv Artemis 2G subsea electronics module — The Artemis 2G subsea electronics module (A2G SEM) is a next generation controls and communication technology for both green and brownfield applications.

Speaking about the employee-ownership scheme, Fraser added: “Our people are the backbone of our business, and their dedication and hard work have been instrumental in driving our achievements. In recognition of this, we are committed to implementing our new employee ownership programme by the end of the year.

“This initiative, which we believe sets us apart in our sector, will empower our people to share in the rewards of our collective success and further enhance our positive team culture and long-term growth.”

Proserv’s chairman David Currie said the deal marked “an important next chapter in the Proserv story”.

Currie, who was previously a CEO of the firm said he would remain in the role. “I look forward to continuing to support Davis, Mark and the wider leadership team.

“We are confident that Proserv is poised for a period of sustained growth and our shared vision will drive us forward as we strive to become the industry leader in our field.”

GIIL principal Inniss stated: “Having known and supported the Proserv leadership team for the last five years, this was an easy decision for us to demonstrate our commitment to support the business and its strategy.”