Deal flow surges as TIC passes the COVID-19 test
SPOT ON | TESTING, INSPECTION & CERTIFICATION | FEBRUARY 2021
The thriving TIC sector continues to attract heavy investment from private equity due to increasing demand for global supply chain regulation and compliance, standardization and a strong focus on health and safety during the pandemic. Oaklins’ specialist Arjen Kostelijk casts his eye back over Q4 2020’s frenetic M&A activity to give a breakdown of relevant deals and looks forward to the future to see what’s driving the global TIC market’s 3.6 % CAGR growth forecast.
During Q4 2020, deal flow in the TIC sector surged. While the general M&A market slowly recovers from the COVID-19 impact, M&A in the TIC sector is currently thriving due to the market’s strong underlying dynamics. These include, among others, a growing demand for regulation and compliance in global trade, a growing standardization of goods across global supply chains, and an increasingly strong focus on health and safety.
"The last quarter of 2020 has seen a surge of TIC deals, with a large piece of the pie for private equity and private-equity-backed acquirers."
ARJEN KOSTELIJK | OAKLINS TIC SPECIALIST
Major TIC players have also been engaged in acquisitions in recent months, most notably with the acquisition of SYNLAB Analytics and Services, the services arm of laboratory testing company SYNLAB, by the Switzerland-based TIC major SGS, for around $665 million in November 2020. Further consolidation is expected to continue to drive acquisitions in the growing TIC market.
Next to TIC companies making acquisitions to broaden their sector coverage, we see private equity investors increasingly investing heavily in the TIC sector, where almost half (ca. 46%) of the analyzed TIC deals in 2020 involved private equity on the buy-side.
This month’s case study covers the sale of Irish-based, niche health and safety business ASM Group to Phenna Group, a UK group of specialist businesses focused on the testing, inspection, certification and compliance (TICC) sector. We round up this issue of Spot On with the latest market multiples and valuations to keep you up-to-date with current industry trends.
To read the Full Version of the February TIC Spot-On report, click the link below!