3i makes 3.9x on Element Materials Technology exit to Bridgepoint

Exiting five years after acquiring EMT for €150m, 3i's total proceeds from the investment were £215m, having also realised value in a 2014 refinancing.

New owner Bridgepoint financed the SBO with commitments from its Bridgepoint V vehicle, a 2014-vintage fund that closed on €4bn. In terms of the GP's strategy for EMT, Bridgepoint said it sees significant consolidation potential in the sector.

Previous funding
3i acquired EMT in a 2010 carve-out from parent company Stork. Then called Stork Materials Technology, the GP renamed the business and moved its headquarters from Amsterdam to the UK.

During 3i's ownership, EMT bolted on Detroit Testing Laboratory in December 2011 as a balance sheet acquisition, and Cincinnati-based MAR-TEST in early 2012, with a further six add-on acquisitions leading up to the exit.

The GP first received dividends from its investment in August 2012, when it secured a $93.25m refinancing package from its existing banking syndicate and two new banks. 3i received a further £28m in 2014 from a $325m cov-lite refinancing, having also agreed on additional financing with lenders in August the year prior.

Company
Element Materials Technology is a product qualification testing and failure analysis company mainly serving the aerospace, oil & gas, transportation and industrial sectors.

Headquartered in the UK, EMT employs 1,800 people and has revenues of $293m with EBITDA of $80m.

People
Alan Giddins is the co-head of 3i's private equity division and Andrew Olinick is a partner and co-head of 3i's North America private equity team. Partner Chris Busby led the deal for Bridgepoint. Charles Noall is the president and CEO of EMT.

Advisers
Vendor - Rothschild (Corporate finance); Baird (Corporate finance); A&O (Legal).
Equity - RBC Capital Markets (Corporate finance); HSBC (Corporate finance); PwC (Debt advisory); EY (Financial due diligence); Shearman (Legal); CSP (Commercial due diligence); Calash (Commercial due diligence).
Management - Wyvern (Legal); DLA (Legal); PWC (Tax).

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• Topics
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• 3i
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• Secondary buyout