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Exova accepts £620m takeover bid from Element

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By Joe Whitworth+

21-Apr-2017

©iStock/georgetsartsianidis
©iStock/georgetsartsianidis

Element Materials Technology is to acquire Exova Group for £620m (€741m).

The transaction is subject to approval from Exova shareholders and regulators.

It has been accepted by Exova’s board and largest shareholder, Clayton, Dubilier & Rice (CD&R), the private equity group, which owns 54% of the company.

Exova said it was in discussions with three parties last month – the two others in the race being PAI Partners and Jacobs Holdings.

The deal will create a global materials and product qualification testing business with more than 6,200 employees, 195 laboratories and operations in more than 30 countries.

Increase geographical footprint

Element said it will increase reach across North America, Europe and Asia and help develop deeper technical expertise.

It is a materials and product qualification testing provider with a focus on the aerospace, oil and gas and automotive end markets.

The firm has completed 13 acquisitions within the last five years. It is majority owned by BEV, the latest fund of Bridgepoint and was acquired by BEV in March 2016.

Charles Noall, CEO of Element, said combining the two companies will help to better serve customers and support their growth.

“This transaction will create a truly global product and materials testing business, increasing Element’s operational reach across key markets in US, Europe and Asia,” he said.

“The combined UK headquartered group will benefit from deep pools of technical talent, very significant testing capacity and a strong network of facilities to support our customers’ global supply chains

“We believe that this acquisition will facilitate greater flexibility to invest further in capacity and technology, driving further opportunities across the combined group.”

Exova in food testing

Exova is a testing, calibration and advisory services provider. Until 2008, it was the testing and inspection division of Bodycote plc. In 2008, Exova was acquired by CDR.

The firm operates 136 laboratories and offices in 33 countries.

The geographic split for revenue in 2016 was Europe (52%), Americas (32%) and Rest of World (16%).

Eurofins Scientific acquired Exova’s food, water and pharmaceutical testing business in the UK & Ireland for £18m (€23m) last year.

Exova’s food testing capabilities include microbiology, nutritional composition and preservatives analysis.

Allister Langlands, chairman of Exova, said it represents a good outcome for shareholders.

“The offer represents 16 times Exova’s 2016 Adjusted EBITA and a premium of 26% to our average share price over the last 12 months.

“It follows a full and thorough process with interested parties and provides all Exova shareholders with liquidity and the ability to realise the value of the group’s opportunities with certainty.”

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