The Business Growth Fund has invested £10 million in Frontrow Energy Technology Group, in order to support the company’s growth plans. The latter plans to utilize BGF’s funding to expand its resources and infrastructure, allowing it to develop even more promising young technology companies in the region’s energy industry.
BGF is also taking a minority stake in Frontrow as a part of the investment. Apart from this, the Group has received an additional investment of £3 million from its founders. Together with the capital, BGF and Frontrow aim to invest in the fledgling energy technology developers.
This investment follows a record year for BGF in the UK and enables it to unlock much-needed investment into a higher number of businesses across Scotland, and specifically in the North East of Scotland.
Frontrow was incorporated in 2013. It was set up by chairman Graeme Coutts, the former chief executive at Expro Group and current chairman of BGF portfolio companies Spex Group and STATS Group, and is led by chief executive Stuart Ferguson.
The Group has acquired, established and grown a group of energy service companies, forming a hub for the development of new technologies and offering entrepreneurial teams operational guidance and expertise. Graeme says,
This funding will allow us to acquire and to grow more high-potential companies in the energy sector. Our vision is to build a group of world-leading technology businesses based here in the North East of Scotland, which has long been a centre for the development of downhole and subsea technologies.
Energy companies that are already in the group portfolio include Well-Sense, Well-Centric, and Interventek. The firms are based in the same incubator facility in Dyce, Aberdeenshire and have access to extensive shared resources.
Mike Sibson, an investor in BGF’s Aberdeen office will be joining the board of Frontrow. He says,
The past two years have been incredibly challenging for companies operating in the North East of Scotland’s oil and gas industry, and many entrepreneurs have understandably been shaken by the downturn. Despite these strong headwinds in the energy industry, and across the whole of UK, 2016 was a record year for BGF, and we will continue partnering, supporting and investing as part of our strategy to provide truly long-term capital to companies scaling up.
He further states that this deal will allow them to invest in the growth and development of Frontrow, and also, extending their reach into younger, earlier stage companies in oil and gas, and the broader energy industry. He adds, they are backing a team with a deep understanding of energy technology, a strong industry network, and the operational experience to bring new products to market.
