{"id":982,"date":"2018-02-14T00:00:00","date_gmt":"2018-02-14T00:00:00","guid":{"rendered":"https:\/\/capitalmind.eu\/testing-inspection-certification-sector-report\/"},"modified":"2025-01-08T08:54:24","modified_gmt":"2025-01-08T07:54:24","slug":"testing-inspection-certification-sector-report","status":"publish","type":"post","link":"https:\/\/www.investec.com\/advisory\/testing-inspection-certification-sector-report\/","title":{"rendered":"Testing, Inspection &#038; Certification &#8211; Sector Report"},"content":{"rendered":"<p><strong>TIC valuations at historic highs. For how much longer?<\/strong><\/p>\n<p>The M&amp;A market for Testing, Inspection, Certification (TIC) has become even more favorable for sellers: a large number of transactions and valuation multiples are at historic highs, as trade-buyers target external growth and Private Equity (PE) eagerly pursue buy &amp; build projects. We expect buy-side demand to remain extremely supportive in what is still a widely fragmented industry, where all of the large and mid-sized players are targeting double-digit growth rates.<\/p>\n<div>\n<p>Key insights:<\/p>\n<ul>\n<li>Globally, it is full steam ahead for the M&amp;A market thanks to a pickup in economic activity, a wider availability of low-cost financial debt (mostly \u2018bullet\u2019 and \u2018covenant light\u2019) and the growing presence of PE firms in the market.<\/li>\n<li>The TIC sector is especially hot and seeing historically high returns for investors, due to extremely strong and resilient industry fundamentals.<\/li>\n<li>Together the top 12 market leaders have closed more than 500 transactions since 2010. Interestingly, most are also embarking on strategic reviews to define 5-year plans: tapping new growth areas, developing and streamlining organizations (eg. digital capabilities) and considering divestments of single digit EBIT-margin businesses.<\/li>\n<li>PE funds are aggressively seeking buy &amp; build projects in the mid-market, where many dynamic high-growth companies with revenues of \u20ac10m to \u20ac100m are emerging. Around 70% of all TIC&nbsp; companies with revenues of \u20ac50m to \u20ac1bn are already owned by financial investors.<\/li>\n<li>Listed players are being valued at 16x EBITDA, on average, while transaction multiples have increased by 10% to 20% over the last three years &#8211; at 8x EBITDA for small-caps, and 11x for midcaps. Digitalization is a game-changer, and making a big impact on the customer offer.&nbsp; The industry is moving away from traditional legacy control and inspection services towards more sophisticated&nbsp; and integrated solutions.<\/li>\n<li>In the current market environment the hottest segments for acquirers include building &amp; infrastructure, which are both back on track; security; health &amp; safety; energy efficiency; and also food &amp; pharma.<\/li>\n<li>We expect the M&amp;A market for TIC to be even more active in 2018, as the industry tackles digital transformation and the bullish fundamentals continue to improve.<\/li>\n<\/ul>\n<\/div>\n","protected":false},"excerpt":{"rendered":"<p>TIC valuations at historic highs. For how much longer? The M&amp;A market for Testing, Inspection, Certification (TIC) has become even&#8230;<\/p>\n","protected":false},"author":55,"featured_media":1726,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"inline_featured_image":false,"footnotes":""},"categories":[71],"tags":[78],"news-event-type":[],"dealtype":[],"class_list":["post-982","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-sector-and-product-insights","tag-tic","ps-business-services"],"acf":[],"yoast_head":"<!-- This site is optimized with the Yoast SEO plugin v27.8 - https:\/\/yoast.com\/product\/yoast-seo-wordpress\/ -->\n<title>Testing, Inspection &amp; Certification - Sector Report | Investec Business Advisory<\/title>\n<meta name=\"description\" content=\"The Mergers &amp; Acquisitions market for Testing, Inspection, Certification (TIC) has become even more favorable for sellers\" \/>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/www.investec.com\/advisory\/testing-inspection-certification-sector-report\/\" \/>\n<meta property=\"og:locale\" content=\"en_US\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"Testing, Inspection &amp; 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