A new energy services business headed up by the Scottish team behind the blockbuster sale of EnerMech has completed its first international acquisition as it seeks to become a £100m turnover operation within five years.
The deal to take over Texas-based Cotech marks the fourth and largest acquisition by Aurora Energy Services since it was set up in April by energy sector entrepreneurs Doug Duguid and Michael Buchan to support the transition to net-zero energy. Cotech's 100 members of staff will join Aurora's existing 175 employees to create a business with projected revenues of £35m in its first year of trading.
Founded by Aberdonian Mike Wallace in 2005, Cotech provides a range of rope access and non-rope access inspection, repair, construction and maintenance services, with the majority of its work being in the onshore and offshore wind sector.
Mr Wallace and his son, finance director Mark Wallace, and other senior management will remain part of the enlarged business and will spearhead Cotech’s growth in the US while exporting the company's expertise into European, Asian and Australian renewable energy markets. Aurora is also aiming to expand the services currently provided by Cotech in Brazil to other parts of South America.
A key component of the deal included a significant investment by Australian-based Niall Conlon, who is now a major shareholder of Aurora and will sit on the executive board alongside Mr Duguid and Mr Buchan. Between them the three own 76% of Aurora, with the remainder held by other members of the management team and an employee share option scheme.
Mr Conlon joined EnerMech in 2013 when his Australian industrial firm Vicon was acquired by Aberdeen-based oil services group EnerMech. EnerMech was sold in 2018 to US private equity group Carlyle in a deal thought to be worth about £450m.
Mr Duguid said Cotech's workforce is expected to treble to more than 300 staff, with the acquisition boosting annual revenues by £30m and earnings by £3.5m over the next three years.
READ MORE: Aberdeen oil services firm sold in blockbuster deal
“This strategic acquisition is important on a number of levels, giving us immediate access to the massive US wind sector, and laying the foundation for rapid expansion in Europe, Australia and Latin America," he said.
“Mike Wallace has established an excellent highly-respected business and Cotech’s standing in the US onshore and offshore wind sector adds a layer of expertise which Aurora can utilise outwith the company’s established markets.
“We will export Cotech’s skills and experience firstly into the UK and Europe, and send key members of our Scottish team to the US to benefit from the latest training and techniques in wind energy inspection and repair services.”
Mike Wallace added: “Aurora’s mission statement is to grow a £100m revenue energy services business with a global footprint and we are excited to be part of that vision.
"Our skills, which have been honed in the US wind energy and oil and gas sector, are highly transferrable and alongside staged expansion in our domestic market, we can make an important contribution to Aurora’s international ambitions.”
READ MORE: Aurora completes third acquisition to power expansion
Mr Conlon is said to have been "instrumental" in growing the EnerMech business, with Australian revenues reaching $250m over a five-year period. A "major component" of Aurora’s launch and growth strategy included Mr Conlon taking an ownership stake and joining the management team "at an appropriate juncture".
“Niall’s track record in successfully growing businesses, identifying opportunities, and converting those into mutually beneficial client partnerships is invaluable, and we are delighted to have him back on board," Mr Duguid said.
"We have established a very strong management team with a wealth of international experience, and with other additions in the pipeline, Aurora is well-placed to continue on the path to becoming a recognised name in the energy services space.”
The Cotech transaction follows the acquisition of three UK companies - Northern Marine Services, R&M Engineering, and Inverness Access Training Services - and the owners of all four businesses are shareholders in Aurora Energy Services.
Why are you making commenting on The Herald only available to subscribers?
It should have been a safe space for informed debate, somewhere for readers to discuss issues around the biggest stories of the day, but all too often the below the line comments on most websites have become bogged down by off-topic discussions and abuse.
heraldscotland.com is tackling this problem by allowing only subscribers to comment.
We are doing this to improve the experience for our loyal readers and we believe it will reduce the ability of trolls and troublemakers, who occasionally find their way onto our site, to abuse our journalists and readers. We also hope it will help the comments section fulfil its promise as a part of Scotland's conversation with itself.
We are lucky at The Herald. We are read by an informed, educated readership who can add their knowledge and insights to our stories.
That is invaluable.
We are making the subscriber-only change to support our valued readers, who tell us they don't want the site cluttered up with irrelevant comments, untruths and abuse.
In the past, the journalist’s job was to collect and distribute information to the audience. Technology means that readers can shape a discussion. We look forward to hearing from you on heraldscotland.com
Comments & Moderation
Readers’ comments: You are personally liable for the content of any comments you upload to this website, so please act responsibly. We do not pre-moderate or monitor readers’ comments appearing on our websites, but we do post-moderate in response to complaints we receive or otherwise when a potential problem comes to our attention. You can make a complaint by using the ‘report this post’ link . We may then apply our discretion under the user terms to amend or delete comments.
Post moderation is undertaken full-time 9am-6pm on weekdays, and on a part-time basis outwith those hours.
Read the rules here