3i, an international investor in private equity, infrastructure and debt management, and funds managed by 3i have signed an agreement to acquire Stork Materials Technology (SM"), a leading international materials testing services business, in a £130 million/€150 million transaction. 3i has underwritten the full transaction amount.
Headquartered in the Netherlands, Stork Materials Technology is a network of independent, accredited laboratories providing testing solutions to industry throughout Europe and the US. SMT experts support businesses with materials testing, product qualification testing, failure analysis, consulting and calibration services. Originally, a division of Stork Technical Services, which in turn is part of Stork BV, SMT employs more than 800 engineers, scientists, and technicians and serves over 20,000 customers across a number of industrial segments including aerospace, oil and gas, power and advanced engineering. SMT has 12 laboratories in Europe, of which eight are based in the Netherlands, and 15 in the US.
3i's investment in SMT will provide the business with access to 3i's global network as well as additional resources to support acquisitions in Europe and the US, continue the existing operational improvement program and strengthen its market position through organic growth.
3i has extensive experience investing in the business services sector and in particular has a very strong track record within the testing and inspection industry. During 2010, 3i has invested in Trescal, a European calibration and measurement services company with over 50 laboratories across 11 European countries, and also successfully sold Inspectorate, a global commodity testing and inspection division and subsidiary of Inspicio, to French-listed Bureau Veritas for £450million/€585 million.
Other current 3i investments in testing and inspection include ESG, the UK's leading environmental and food testing company; Labco, the leading European network of diagnostics centres for healthcare services; and Carso, the French leader in chemical, biological, physical and radioactivity testing services for the food, environmental and residential sectors.
Ad Verkuyten, a member of 3i's Business Leaders Network ("BLN") and Chairman of Inspecta, a 3i-backed provider of inspection, testing and certification services in the Nordic region, will be joining the board as a non-executive director. 3i's BLN is a global pool of the very highest caliber business leaders that help portfolio companies realise their growth plans.
Alan Giddins, Jo Wetz and Andrew Olinick will also join the board from 3i. Charles Noall, SMT CEO, commented, "3i's experience in the testing and inspection sector and their commitment to our operational growth strategy were key to this transaction. We are looking forward to the next stage of our development as we focus on growing our business, expanding our capabilities and further consolidating the testing market."
Menno Antal, 3i Managing Partner Northern Europe and Head of Buyout Funds, commented, "3i has been tracking SMT for a number of years through our local network in the Benelux. We are attracted to the company's market leading position in a sector we understand well, exceptional management team and growth prospects. We are confident in our ability to add value to the business beyond being simply a provider of capital."
Alan Giddins, 3i Managing Partner UK, commented, "Our investment in SMT follows a number of successful investments by 3i in the testing and inspection market. We look forward to working in partnership with Charles Noall and the rest of the management team to continue to grow the business. In particular, we see the fragmented nature of the testing market as presenting a significant opportunity to pursue a buy and build strategy alongside the existing strong organic growth within the business."
3i advisers on the deal include Rothschild (corporate finance), Allen & Overy (lawyers), Deloitte (financial and tax due diligence) and McKinsey (operational due diligence). Management was advised by Wyvern Partners. Stork was advised by KPMG (corporate finance), Rabo Securities, Deloitte (financial due diligence) and PWC (commercial due diligence). The transaction is expected to close end December 2010 / early in the New Year.
Stork Materials Technology to be Acquired by 3i
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