3i-backed Element Materials Technology (“Element”), the leading independent global materials testing provider, has successfully completed a US covenant-lite refinancing to support its buy-and-build strategy. Proceeds will be used to fund recent and pending acquisitions, refinance existing debt and returns to shareholders. Both existing and new lenders participated in the refinancing. The refinancing was supported by 3i’s in house banking team.

3i Group, and funds managed by 3i, invested in Element in December 2010, acquiring a majority stake in the business. Total cash returned to 3i Group and funds managed by 3i was circa £51m ($85m). The cash returned to 3i Group plc was circa £28m ($47m), through the repayment of existing shareholder debt and accrued interest. 

Under 3i’s ownership, Element has increased its international reach across Europe and the US, where it is the largest independent materials testing company. Since 2010, revenues have increased from approximately $100m to in excess of $250m.  This expansion has been achieved by organic growth and by pursuing a build-and-buy strategy through which seven acquisitions across Europe and the US have been successfully completed. 

Andrew Olinick, Principal, 3i commented: “Element has demonstrated strong and consistent growth since 3i’s buyout in 2010. This covenant-lite refinancing, which was significantly oversubscribed, demonstrates the strength of Element. The new facility provides Element with access to significant further debt capital to support its future growth plans.”

Charles Noall, President and CEO of Element, said: “Element has continued to execute on its strategy to expand its capabilities and leadership position in the Aerospace, Oil and Gas and Transport and Industrials markets.  The recent GEVA and Accutek acquisitions further consolidate Element’s position in the attractive US and European aerospace testing markets.  These new funds provide further capital to continue our planned expansion within our core markets.”

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For further information, contact:

3i Group plc
Kathryn van der Kroft
Tel: +44 20 7975 3021
Email: kathryn.vanderkroft@3i.com

Latika Shah
Tel: +44 20 7975 3157
Email: latika.shah@3i.com 

Notes to editors:

About Element
Element is a global network of laboratories with experts specializing in materials testing, product qualification testing and failure analysis for the Aerospace, Oil and Gas and the Transportation and Industrial sectors. Their team of more than 1,500 scientists, engineers and technicians work in 43 facilities located throughout the U.S. and Europe. For complete Accreditations & Approvals and more information, please visit www.element.com.

About 3i Group
3i is a leading international investment manager focused on mid-market Private Equity, Infrastructure and Debt Management across Europe, North America and Asia. For further information, please visit: www.3i.com.