An Aberdeenshire pipeline technology business has been acquired for an undisclosed sum by Mitsui & Co – one of Japan’s biggest general trading companies.
STATS (UK), based in Kintore, near Inverurie, said it was selling 100 per cent of its issued share capital to Mitsui, which is currently valued around £45 billion on the Tokyo Stock Exchange.
Mitsui said it was buying STATS because demand for the repair and maintenance of ageing energy pipeline infrastructure – a key area of expertise for STATS – was expected to continue growing as the industry looked to prolong the life of its assets in the drive to decarbonise.
The pipeline plugging, isolation and connection tools that STATS specialises in could also be used to turn miles of redundant pipeline on the seabed into storage containers for carbon dioxide and hydrogen – an area of particular interest for Mitsui.
READ MORE: North Sea oil and gas sector could pay for net zero policies
Leigh Howarth, chief executive of STATS, said: “Having worked with the Mitsui team for several months now, we’re delighted to be formally joining forces to pursue opportunities in both the traditional oil and gas pipeline markets and the emerging low carbon markets.”
Mitsui said STATS would be combined with its Iron & Steel Business Unit, and the transaction was expected to complete in the summer, subject to regulatory competition approvals being satisfied.
Koichi Fujita, chief operating officer of Mitsui's Iron & Steel Products Business Unit, said: "With STATS' position as a market leader in the global energy industry, we are confident that this acquisition will strengthen Mitsui's business processes and provide new opportunities for growth in the areas of carbon capture and storage and hydrogen.
"We will also leverage our network and expertise to maximise STATS' growth potential and achieve market acceleration for sustainable infrastructure maintenance."
Shareholders in STATS include chairman Pete Duguid, who founded the business in 1998 and will now retire. The company, which employs around 340 people, also has a staff share scheme.
READ MORE: Carbon storage cluster could create jobs in Aberdeen area
STATS said Leigh Howarth and all its other executive members would remain with the company after the transaction completes.
Mr Howarth said Mitsui’s broad energy relationships and investments would support “significant growth potential” for STATS following the transaction, and “excellent career development opportunities for all our staff,” as a result.
The sale to Mitsui follows a previous deal in December 2021, when an Australian listed company, SRJ Technologies Group, agreed to acquire STATS for £73m. The deal later fell through when SRJ said it had been unable to raise funds for the acquisition because of market volatility caused by underlying macro, geopolitical, and supply chain events.
Mitsui’s acquisition will enable private equity investor, Business Growth Fund (BGF), to realise its investment and exit the business. BGF was originally set up by the UK government in 2011 with £2.5 billion of funding to support small and medium-sized enterprises. It invested £12.2 million in STATS in 2012.
READ MORE: Kintore energy engineer STATS hikes revenue
STATS currently operates in nine countries and has offices in Edmonton, Canada; Houston, USA; Abu Dhabi, Saudi Arabia, Oman and Qatar in the Middle East; Kuala Lumpur in Malaysia and Perth, Australia. The company said it was seeing global demand for its technology and services and a “very buoyant market.”
Last May, STATS announced a 17% in increase in annual revenues to £49.7m and a 50% rise in pre-tax profits, from £1m to £1.5m. The company specialises in pipeline isolation, hot tapping and line plugging – all different ways of safely isolating sections of pipeline while these are repaired, without interrupting oil and gas production.
Mitsui’s business spans sectors including iron and steel, non-ferrous metals, machinery, chemicals, foods, energy, textiles, and general merchandise. It has more than 46,000 employees in 63 countries.
For the year to the end of March 2023, Mitsui reported a 22% rise in annual revenues to 14.3bn Japanese yen (£78bn) and a 20% increase in pre-tax profits to 1.4bn Japanese yen (£7.6bn).
The company can trace its roots back to the 17th century and is a Japanese ‘sogo shosha’ – the name for Japanese companies that trade in a wide range of goods and materials.
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