THE Business Growth Fund (BGF) has completed its first deal in Scotland, almost 18 months after a group of banks created it.
Established following complaints that lenders were failing to support small and medium sized enterprises, the fund has invested £7.8 million in STATS Group, an Aberdeenshire-based pipeline specialist.
STATS has developed tools that are used to maintain the integrity of pipelines that carry oil and gas and other commodities. These include a plug that can be used to allow firms to work on sections of pipelines without shutting the whole system down.
The company was founded by its chief executive Peter Duguid and his sister Lorraine Porter in 1998. It has been achieving rapid growth amid the boom in activity in global oil markets.
The company expects to grow revenues by 75% this year, to £25m, from £14m last year.
Simon Munro, the BGF's director for Scotland, said: "STATS has the potential to achieve very rapid growth. It is a relatively small player in a market which is currently worth around £500m annually."
"Our investment in STATS is a milestone for BGF, as our first deal in Scotland, our first in a business that manufactures its own products, and our first in the vibrant oil and gas sector," said Mr Munro, who took up his post in September last year.
He said BGF had made good progress in Scotland.
The fund is adding a fifth member to its investment team and has already built a strong pipeline of potential deals in the central belt as well as Aberdeen. Mr Munro expects to complete five deals this year.
He said firms appeared to like the fact that the fund would only take minority stakes in companies and would invest for the long term.
A group of six banks, including Royal Bank of Scotland and Lloyds Banking Group, agreed to form a £1.5 billion business growth fund in October 2010.
The Fund became operational in April last year as a £2.5bn scheme backed by five banks.
The fund has completed six deals across the UK.
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