Auction for Bridgepoint's Element to kick off next year

The auction for the UK-based material testing and inspection services group is slated to kick off in Q2 2022, one of the sources said, adding that Bridgepoint could appoint a second investment bank to act alongside Bank of America.

A sale of Element is likely to be highly contested by other private equity firms, with increased demand businesses in the testing, inspection and certification (TIC) sector having led to a surge in their deal value and volume in recent months.

Element is positioned as a strong consolidation platform for financial sponsors that would look to expand into other verticals and geographies via M&A, one of the sources said.

In anticipation that a deal could value Element at around EUR 4bn, some buyout groups are already in the process of exploring bidding consortiums. Canadian pension fund CPPIB is said to be in early discussions with Cinven Partners about a joint offer for the business, according to media reports. The business could be marketed based on EBITDA in the EUR 200m-300m range, one of the sources said.

Under Bridgepoint's ownership, Element acquired Exova Group in a USD 1bn take-private in 2017. The deal doubled Element's size and welcomed sovereign wealth fund Temasek as a significant minority shareholder at the end of 2018.

Element is an independent provider of materials and product qualification testing, inspection and certification services to companies in the global aerospace, transportation, industrial, fire, building products, oil and gas, and infrastructure sectors.

Bridgepoint declined to comment. Bank of America did not return requests for comment.

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