Bridgepoint Agrees to Buy 3i’s Element Materials Technology

  • Element Materials valued at about 900 million euros: sources
  • Bridgepoint sees Element continue its growth in next 5 years

Bridgepoint agreed to buy Element Materials Technology from 3i Group Plc, Britain’s oldest private-equity firm, and plans to grow the business further with acquisitions over the next five years.

Element, which operates laboratories for materials testing and product qualification for the aerospace, defense and energy industries, increased its revenue to about $290 million from about $100 million when 3i bought the business in 2010, the companies said in a joint statement on Thursday. The company more than doubled the number of labs through 10 acquisitions and now has 34 in the U.S. and 19 across Europe.

“As a platform investment in a sector with significant consolidation potential, this is an opportunity for Element to continue to grow strongly for the next five years,” Chris Busby, a partner at Bridgepoint, said in the statement. The acquisition will help Element “to accelerate the execution of our strategic growth plans,” Charles Noall, chief executive officer of Element said in the statement.

The deal values Element at about 900 million euros ($976 million), according to people familiar with the deal, who asked not to be identified as the information is private.

Bridgepoint worked with RBC Capital Markets and HSBC Holdings Plc as financial advisers and Shearman & Sterling as legal adviser. Rothschild & Co. and Robert W. Baird were financial advisers to 3i and Allen & Overy the legal adviser.

3i invested in Element in five years ago through a 150-million euro carveout from Stork, a management service provider for the oil and gas, power and chemical sectors, according to the company’s website.

This year Stork has also changed hands. Its owner, Arle Capital, earlier this year sold Stork’s former aerospace division, Fokker Technologies Group, to GKN Plc in a deal that valued the company at 706 million euros. Arle also sold the Stork Holding group to Fluor Inc. for 695 million euros.

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