Singapore’s sovereign wealth fund to buy testing firm Element Materials Technology for £5bn
A £5billion testing and certification firm looks set to fall into foreign hands following a swoop by Singapore’s sovereign wealth fund.
Element Materials Technology’s wide-ranging work includes testing Rolls-Royce plane engines, checking how corrosive oil and gas pipelines are and evaluating how resistant the cladding on buildings is to fire.
Temasek has been a minority investor in Element since 2019. It is planning to buy the rest of the company from private equity group Bridgepoint.
Sold: Element Materials Technology’s wide-ranging work includes testing Rolls-Royce plane engines (pictured) and checking how corrosive oil and gas pipelines are
But the proposed deal could attract the interest of ministers who have been given powers to block foreign takeovers.
Bridgepoint began exploring a sale of Element late last year. Groups including Cinven and Canada Pension Plan Investment Board were also thought to be interested in the business. Temasek was keen to pre-empt a formal sales process, Bloomberg reported.
Temasek oversees around £210billion in assets and has investments in British groups such as Prudential and Standard Chartered, as well as groups such as Blackrock and Dell.
Element was founded in 2010 from the management buyout of the testing division of the Netherlands-based Stork Engineering Group, with backing from private equity firm 3i.
It traces its history back to 1827 from Stork’s in-house materials testing and product testing laboratories.
When Element launched in 2010 it had 860 employees and 27 laboratories worldwide.
The company was involved in the testing Concorde, the first supersonic airliner, and the largest planes that are in service today, the Boeing Dreamliner and the Airbus A380.
Bridgepoint, which bought it from 3i in late 2015, backed the takeover of rival group Exova in June 2017.
This doubled the company’s size and it now has more than 7,000 scientists and a network of 200 laboratories in 30 countries.
It is one of the world’s leading providers of testing, inspection and certification services.
The company’s expertise means it could fall under the remit of the Government’s National Security and Investment Act, which came into force earlier this month.
The law is aimed at preventing takeovers of companies in a range of strategic industries whose loss could compromise Britain’s national security, as well as to secure greater protections for firms that do get sold.
Shares in Bridgepoint fell 3.8 per cent, or 14.5p, to 371p on the back of the news.
The private equity giant went public in London in a bumper float last year. Founded in 2000 by David Shaw and William Jackson after a management buyout from Natwest Equity Partners, it raised £300million when it listed at £3.7billion.
But a recent share tumble means it is worth £3.2billion.