Testing firm Exova sold for £620 million

US private equity firm Clayton Dubilier & Rice, funds Fidelity, First Pacific, T Rowe Price and Abu Dhabi investor Mubadala today cashed out of turbulent FTSE 250 lab-testing firm Exova as it accepted a £620 million offer from a rival.

The buyer was Element Materials, majority owned by a division of buyout-house Bridgepoint.

CDR, which counts former Tesco boss Sir Terry Leahy as one of its advisers, owns 54% of the testing company after first buying it in 2008.

It floated the oil and gas specialist for £550 million three years ago — and then watched Exova’s value crumble as the crude market collapsed.

Element is paying Exova shareholders 240p per share in cash, about 10% more than the stock’s last unaffected share price, plus a final dividend of 2.35p a share.

Exova employs more than 4500 people in 32 countries, including 1200 in the UK. Takeover talk has seen shares in the firm — which has diversified since the oil crash into areas including testing the London Underground for fire safety — rise 40% over the past year. The shares are now back at their original 220p float pricing.

The banks raking in fees for the deal are HSBC and Bank of America Merrill Lynch, joint advisers to Element and Bridgepoint, plus Goldman Sachs and Investex, who worked for Exova.