As long-term advisers to the Testing, Inspection & Certification (TIC) sector, Investec | Capitalmind hosted our inaugural European TIC conference in March 2023. Industry leaders joined us for a lively discussion about the future of the sector – including digitalisation, sustainability, and M&A strategy.


Watch the highlights from the 2023 inaugural European TIC Conference

Three common themes were raised in discussions about the future of the TIC industry.

  • Independent verification for ESG

    The sector is heavily intertwined with the growing requirement for greater environmental, social, and governance (ESG) standards among businesses. As companies increasingly seek to promote their ESG credentials, avoid accusations of greenwashing and meet incoming European regulations, the TIC sector will play a crucial role, not only in verifying ESG standards, but also in providing guidance to help companies navigate these often-complex issues.

    Hervé Montjotin affirmed the growing demand for independent verification, saying, “Regarding sustainability, people need to be reassured by a trusted third party so we can add a lot of value and help avoid greenwashing.”

    Mark Williams highlighted the need to test for unforeseen consequences as businesses seek to improve the sustainability of products. He said, “we are using different materials to make things better and more efficient, but these need to be checked to ensure that whatever has been created is more sustainable and that we don’t find out in 15 years that there are negative impacts.”

    Paul Hesselink noted that TIC firms are not only ensuring sustainability and ESG compliance for their clients, but are measuring their own performance against these objectives too: “Carbon dioxide footprinting, gender diversity indices…we don’t just measure these for our customers but for our own business too – walking the talk and demonstrating that we are living up to what we preach.”

  • The digitalisation challenge

    As with many industries, the digitalisation trend – which encompasses digital, data and new technologies (notably sensors, portable instruments and the Internet of Things) – is transforming internal processes for the TIC sector, as well as its business models and the services it offers. Our panel acknowledged how influential digital tools have been in liberating productivity and improving profitability.

    However, they cautioned that the pace of potential digital disruption is being slowed by the sector’s conservatism, as well as regulatory reticence. For example, regulators still require in-person inspections rather than using digital tools. The panel agreed that the industry should stay one step ahead of the main pack in terms of technology so that it will be ready when its customers and the regulators are, but acknowledged the sector is unlikely to be a change leader.

  • Expansion in a rising interest rate environment

    It was widely accepted that the current economic environment is creating a new set of challenges – particularly in terms of M&A. Mark Williams pointed out that higher borrowing costs could inhibit some forms of M&A activity, but notes that “there is still demand for quality platforms and there are still entrepreneurs that want to sell.” He added that the focus on high margins was particularly important for many private equity buyers.

    Paul Hesselink joked that higher interest rates should help shake off the private equity competition, remarking that “industrial and private equity buyers have different dynamics – industrial buyers can be less margin driven as they have more time to develop a business if it is the right cultural fit.”

    Hervé Montjotin added that his business had sought a more global expansion strategy as this can help alleviate cyclical risks. He said that while the industry is “cyclical, those cycles are often domestically orientated, and having a global balance can help mitigate such risks.”

    Finally, Mark Williams summarised why the TIC space continues to remain an attractive M&A prospect, saying, “We’ve seen the sector evolve and maintain a steady cadence of growth; while the themes have changed, the concept of securing peoples’ lives and futures is the same as it was 50 years ago. Therefore the industry will keep surviving as we need to secure the world around us.”

Download the 2023 TIC Conference presentation PDF 1.51 MB


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Ed Thomas

Ed Thomas

Head of Services M&A advisory