Edinburgh testing group Exova agrees to £620m takeover

Edinburgh-based Exova employs about 4,200 people around the world. Picture: Contributed
Edinburgh-based Exova employs about 4,200 people around the world. Picture: Contributed
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Exova, the Edinburgh-headquartered industrial materials testing business, has agreed to a £620 million takeover by Dutch rival Element Materials Technology.

The move comes weeks after Exova, which has 200 staff in Scotland, said it had received a trio of bid approaches, sending its shares soaring.

• READ MORE: Exova shares jump following trio of bid approaches

Under the deal, Element – which is backed by private equity group Bridgepoint – will pay Exova investors 240p for each share they hold in the firm, while they will also be in line for a final dividend of 2.35p.

The overall cash value of 242.35p represents a premium of about 26 per cent on Exova’s average share price over the 12 months to 24 March.

Exova, led by chief executive Ian El-Mokadem, floated on the London Stock Exchange three years ago and employs about 4,200 people around the world. It counts the likes of aircraft group Embraer, train maker Hitachi Rail Europe and London Underground among its clients.

• READ MORE: The Edinburgh group testing products around the globe

El-Mokadem, who said it was too early to say whether he would be staying on with the enlarged company, added that the takeover was unlikely to lead to significant redundancies north of the Border.

He said: “It is very much not the purpose of this deal to create value from cost reductions. There will be some opportunities for operational efficiencies, but there is very little overlap in Scotland.”

Chairman Allister Langlands said the takeover by Element “represents a good outcome for shareholders and the combination of Exova and Element creates a global leader in the testing market”.

He added: “Since the IPO, the Exova management team have made significant progress driving organic growth across many of our businesses and developing an attractive acquisition strategy.”

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Element chief executive Charles Noall said: “We are very excited about the potential of combining these two great businesses to better serve our customers and support their growth. This transaction will create a truly global product and materials testing business, increasing Element’s operational reach across key markets in US, Europe and Asia.

“The combined UK-headquartered group will benefit from deep pools of technical talent, very significant testing capacity and a strong network of facilities to support our customers’ global supply chains. We believe that this acquisition will facilitate greater flexibility to invest further in capacity and technology, driving further opportunities across the combined group.”

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