
Bridgepoint sells Element to Temasek for 3.7x money, 30% IRR
Bridgepoint has sold UK-headquartered testing, inspection and certification (TIC) business Element Materials Technology to Temasek in a deal that sees Bridgepoint reap a 3.7x money multiple and 30% IRR.
According to press reports, the deal values Element at around USD 7bn.
Unquote sister publication Mergermarket reported in December 2021 that Bridgepoint was close to appointing Bank of America for a sale process for Element, with the company expected to be marketed based on EBITDA of EUR 200m-300m, with a valuation of around EUR 4bn. The process was likely to draw significant interest from sponsors, sources told Mergermarket. Sky News had reported earlier that CPPIB and Cinven were in early discussions to make a joint offer for the company.
Bridgepoint acquired Element in December 2015 in an SBO that saw previous owner 3i reap proceeds of GBP 186m and a 3.9x return, having acquired the business in a carve-out from parent company Stork in 2010.
Bridgepoint invested in Element via Bridgepoint Europe V, which held a final close in March 2015 on its EUR 4bn hard-cap. Co-investors in the deal included a group of three US pension funds, as well as Finland-based Keva, all of which have exited as part of the sale to Temasek.
According to Unquote sister publication Debtwire, Bank of Ireland, Goldman Sachs, HSBC, ING, Mizuho and Crédit Agricole arranged a USD 435m senior debt package, a USD 30m revolving credit facility and a USD 70m capex facility to support the deal.
Element made several add-ons under Bridgepoint's ownership, the largest of which was its GBP 620.3m acquisition of UK-listed laboratory testing company Exova in 2017.
Temasek has owned a minority stake in Element since 2019, according to a statement, and will now own a majority stake in the business.
The company is expected to continue to bolster its position in end markets including life sciences and connected technologies, according to a statement. More than 60% of its work is dedicated to assisting customers with improving their sustainability, the company stated, meaning it has strong ESG prospects. It has set science-based climate targets and aims to achieve net zero emissions by 2035.
Company
Formed in 2010, Element provides TIC services, operating more than 200 laboratories in 30 countries. It serves clients in industries including life sciences, connected technologies, aerospace, transportation, energy transition, and the built environment. Its testing capabilities range from testing vaccine components in its US-based pharmaceutical laboratories to safety tests for aircraft and autonomous vehicles.
The company posts annual revenues of around USD 1bn and employs more than 7,000 staff. At the time of its acquisition by Bridgepoint, it employed 1,800 staff, with revenues of USD 293m and EBITDA of USD 80m. It is headquartered in London.
People
Element Materials Technologies – Allan Leighton (non-executive chairman); Jo Wetz (CEO).
Bridgepoint – Chris Busby (partner).
Temasek – Uwe Krueger (head of industrials, business services, energy & resources; head of Europe, Middle East & Africa).
Advisers
Vendor – Bank of America Securities (M&A); Goldman Sachs (M&A); Rothschild & Co (M&A); Allen & Overy (legal); EY (financial due diligence, tax); Boston Consulting Group (commercial due diligence).
Management – DLA Piper (legal); Jamieson (corporate finance); PwC (corporate finance).
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