A £73 million takeover of Stats Group has been scuppered by “market volatility”, the Aberdeenshire company said today.
The pipeline technology specialist, based in Kintore, announced late last year it was being acquired by Jersey-headquartered SRJ Technologies in an all-share deal.
But the buyout has fallen through, with Stats citing macro, geopolitical and supply chain events as the reason.
SRJ has advised the Australian Securities Exchange (ASE), where it is listed, the transaction will not proceed.
Stats said this was despite SRJ continuing to believe in the merits of a merger.
The Scottish firm added: “SRJ and its advisors explored several Australian and global funding alternatives to raise the capital required to complete the transaction, but the significant changes to underlying market conditions since the start of 2022 made this extremely challenging.
“The acquisition of Stats will not proceed and the share purchase agreement executed on December 14 2021 will be terminated.”
Stats said it would continue to collaborate with SRJ at an operational level in multiple regional markets, including the UK, Canada, US, Middle East and Asia Pacific.
Leigh Howarth, chief executive, Stats, said: “We have worked closely with the SRJ team to deliver this deal but due to a combination of factors outwith our control we have not been able to conclude the fundraising and, therefore, the transaction will not complete.
“Stats remains in great shape and it is business as usual as we take advantage of some tremendous opportunities, particularly in the Middle East and North America.
“We will focus on delivering client projects safely and efficiently, while continuing to work collaboratively with SRJ to capitalise on the synergy between both organisations.”
Firm on the go 24 years and counting
Founded in 1998 by angel investor Lorraine Porter and her brother Pete Duguid, Stats supplies pressurised pipeline services to the global oil, gas and petrochemical industries.
Today the group has operations in the Canada, the US, Middle East and Malaysia, as well as Kintore. It employs about 320 people globally, including around 160 in the UK.
The company’s last published accounts show turnover of £42.5m in 2020, up from £39m the year before.
Pre-tax profits soared to just over £1m in the latest period. from about £183,400 previously.
SRJ revealed in February it was “temporarily delaying” a fundraising drive worth £80m to fund the acquisition of Stats and provide additional working capital for the combined group.
The move came as a result of “significant changes to underlying market conditions in Australia and globally since the start of 2022, the company said.
SRJ was still hoping to go ahead with the acquisition as late as last week, according to a document field with the ASE.