By Mark Williamson

SUBSEA engineering specialist Ashtead Technology has returned to the acquisition trail with a multi-million deal that underlines confidence in the prospects for the North Sea oil and gas and renewables markets.

Aberdeen-based Ashtead has acquired the Hiretech equipment supply business in a £20 million deal, which appears to have put the firm’s founder Andy Buchan in line for a multi-million payout.

Mr Buchan established Hiretech in 2011 and held a majority shareholding in the business, which he grew into a very profitable operation. The company supplies specialised equipment such as pumps, and related services, to firms operating in offshore energy markets.

The acquisition will allow Ashtead to extend the range of services it offers to clients and provide a boost to profit margins. Ashtead has used Hiretech as a supplier.

The company expects the takeover of Hiretech to help it capitalise on the strong growth potential it sees in the market to provide support services for firms operating in energy markets in the UK and overseas. It follows a period in which services firms have enjoyed a big boost to demand as a result of developments in global markets.

The surge in oil and gas prices fuelled by Russia’s war on Ukraine has encouraged firms to invest in boosting production of both commodities in areas such as the North Sea. The Government caused dismay last month by deciding to increase the rate of the windfall tax on North Sea oil and gas firms’ profits that was imposed in May. However, firms can benefit from a generous investment allowance that was also introduced that month to encourage them to develop new fields to help reduce the country’s reliance on imports.

Rishi Sunak’s government imposed a windfall tax on renewable energy generators without offering them new investment incentives. Global investment in renewables is surging as governments around the world look to support the drive to cut emissions.

In September Ashtead posted a 95 per cent increase in first half profits, to £7.6m. Revenues rose 28% to £31.7m from £24.7m.

The company’s chief executive Allan Pirie said then: “In an ever-evolving energy market, the events of early 2022 have created a focus on the urgent need for governments globally to secure energy supply in a sustainable, affordable and responsible way. This has both heightened the need to accelerate investment in offshore renewable energy and rejuvenated activity in offshore oil and gas.”

The company said it achieved growth across all geographic markets “enabled by higher demand in both offshore renewables and offshore oil and gas”.

Around 54% of revenues were generated in the UK.

In October Ashtead said the strong growth recorded in the first half had continued in the third quarter. Mr Pirrie said then that directors were confident that Ashtead would achieve full year revenues and profits materially ahead of market expectations.

Hiretech generated revenues of £6.5m in the 12 months to October 31. It achieved £4.1m earnings before interest, tax, depreciation and amortisation. Most of its customers are UK-based.

Ashtead noted that the markets Hirectech focused on include decommissioning. This market is growing significantly as fields reach the ends of their lives. Hiretech also supports offshore renewables activity.

The company had 20 employees when it was acquired by Ashtead. All were retained by Ashtead following the deal, taking group employee numbers to 260. The acquisition is the seventh completed in the last five years by Ashtead, which sees scope to act as a consolidator in a market that remains fragmented.

In September Ashtead bought Aberdeenshire-based WeSubsea for around £6m. It said yesterday that the business has been integrated and is performing well.

Ashtead Technology floated on the Aim market in November last year.