Travers Smith LLP has advised longstanding client Bridgepoint and its investee company, Element Materials Technology Group ("Element"), on the proposed cash acquisition of Exova Group plc ("Exova") by Element. It is intended that the acquisition will be implemented by way of a Court-sanctioned scheme of arrangement under Part 26 of the Companies Act 2006.
Participating scheme shareholders will be paid a price of 240 pence per share in cash by the acquiring entity, Greenrock Bidco Limited. In addition, participating scheme shareholders who are on the register of members of Exova as at the close of business on 26 May 2017 will be entitled, conditional on approval by the shareholders of Exova, to receive and retain a final dividend for the period to 31 December 2016 of 2.35 pence per share, which is expected to be paid on 9 June 2017. Participating scheme shareholders at the relevant scheme record time will therefore, when the base price per share and dividend are combined, be entitled to receive 242.35 pence in cash per share. This share price values the entire issued, and to be issued, share capital of Exova at approximately £620.3m (calculated on the basis of a fully diluted share capital of 256,009,630 shares).
An announcement, that agreement on the terms of a recommended cash acquisition had been reached between the boards of directors of Element and Exova, was made at 7am on 19 April 2017 via the RNS feed of the London Stock Exchange. The acquisition is subject to customary closing conditions, including, amongst other things, regulatory approvals and Exova shareholder approval.
Commenting on the acquisition, Charles Noall, Element CEO, 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 U.S., 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."
The Travers Smith team was co-led by head of private equity, Paul Dolman, and head of corporate, Spencer Summerfield, with support from senior counsel Mohammed Senouci, private equity associates Ian Keefe, Tom Hartwright and Matt Powrie and corporate finance associate Sam Mossman. Specialist tax advice was provided by head of tax Simon Skinner and associate Camilla Woodall. Specialist competition advice was provided by competition partner Stephen Whitfield and associate Paul McComb.
Shearman and Sterling LLP advised Element's existing providers of debt finance. Exova was represented by Freshfields Bruckhaus Deringer LLP. Other advisers on the transaction included Goldman Sachs, Investec, Bank of America Merrill Lynch and HSBC Holdings Plc.