Houlihan Lokey Advises National Technical Systems

Houlihan Lokey is pleased to announce that National Technical Systems (NTS), a leading independent provider of qualification testing, inspection, and certification solutions in North America, and a portfolio company of Aurora Capital Partners (Aurora), has sold to Element Materials Technology Group (Element), a global provider of testing, inspection, and certification services. Financial terms of the transaction were not disclosed. The transaction closed on September 26, 2022.

Since 1961, NTS has built the broadest geographic presence in the United States, offering more than 70 distinct product qualification testing categories and related capabilities, including climatic, structural, dynamics, fluid flow, EMI/EMC, lightning, product safety, acoustics, failure analysis, chemical, and other industry-specific tests. With a geographically diverse footprint comprising 29 technologically advanced testing laboratories, NTS facilities are in close proximity to its more than 8,000 clients, allowing NTS to serve the nation’s most innovative companies with industry-leading accessibility and responsiveness.

“NTS’s durable long-term growth is testament to their industry reputation and unique market position, both of which were furthered by an active add-on acquisition program,” said Randy Moser, Partner at Aurora. “By focusing on expanding the Company’s suite of services and geographic breadth while maintaining exceptional customer service, we were able to strengthen NTS’s leadership position and deliver an unparalleled value proposition to its customers. Element represents an ideal strategic partner for the Company in its next phase of growth, and we look forward to watching its continued success.”

“We thank Aurora for their guidance, partnership, and strategic and financial support,” said Ray Milchovich, CEO of NTS. “Working with Aurora, we have dramatically expanded the scope and geographic reach of our testing capabilities and have delivered high-quality certification services to a wide range of customers. From day one, Aurora recognized the critical nature of our offerings, and worked tirelessly to support our growth and strengthen our processes. We look forward to continuing our expansion through our partnership with Element to deliver our solutions to even more customers globally.”

NTS is the leading provider of qualification testing, inspection, and certification services in North America, serving a broad range of industries, including the civil aviation, space, defense, nuclear, telecommunications, industrial, electronics, medical, and automotive end markets. Since 1961, NTS has built the broadest geographic presence in the United States, offering more than 70 distinct product qualification testing categories and related capabilities, including climatic, structural, dynamics, fluid flow, EMI/EMC, lightning, product safety, acoustics, failure analysis, chemical, and other industry-specific tests.

Aurora is a leading Los Angeles-based private equity firm with more than $4.5 billion in assets under management. Founded in 1991, the firm focuses principally on control investments in middle-market companies with leading market positions, stable industry dynamics, attractive business model characteristics, and actionable opportunities for growth in partnership with management. Aurora provides unique resources to its portfolio companies through its Strategy & Operations Program and its team of experienced operating advisors. Aurora’s investors include leading public and corporate pension funds, endowments, and foundations active in private equity investing.

Element is one of the world’s leading global providers of testing, inspection, and certification services for a diverse range of products, materials, and technologies. Headquartered in London, Element’s 7,000 scientists, engineers, and technologists—working in its global network of more than 200+ laboratories—support customers from early R&D through complex regulatory approvals and into production, ensuring its products are safe, sustainable, and achieve market access.

Houlihan Lokey served as the financial advisor to NTS in the transaction. This deal highlights Houlihan Lokey’s preeminent position and continued success advising clients in the testing, inspection, certification, and compliance sector, as well as the deal team’s ability to successfully cultivate its client relationships in order to be selected for repeat assignments.