Global Testing, Inspection and Certification Market to Hit Valuation of USD 376.5 Billion by 2032: Astute Analytica

Global TIC market is experiencing rapid digital transformation, driven by IoT, AI, and analytics. This shift optimizes operations and fuels new tech-focused services. Sustainability demands are escalating TIC’s role in ESG verification. M&A activity remains robust, expanding market reach. Companies must attract digital talent and foster agility to navigate evolving regulatory landscapes and ensure quality across diverse industries.

New Delhi, March 12, 2024 (GLOBE NEWSWIRE) — Global testing, inspection and certification market is estimated to reach market size of US$ 376.5 billion by 2032 from USD$ 252.1 billion in 2023 at a CAGR of 4.56% from 2024-2032.

The Testing, Inspection, and Certification (TIC) market is going through an intense transformation at the moment. Many companies active in the market know that embracing digital technologies and developing digital services are crucial for them to continue operating in a connected world. As the industry’s adaptability has been tested time and time again over the years, this wave should be no different. This is largely due to their ability to constantly enhance safety standards while trying out new ways of doing things. IoT, AI, and data analytics have already made processes run smoother with better accuracy than before. And now they can do even more by creating new testing protocols specifically designed to test digital products.

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ESG compliance is also becoming key to a company’s success today. The TIC sector has always had a unique way of verifying performance in these areas, so it will likely become even more indispensable as stakeholders place greater emphasis on sustainability goals. It will be tricky for big companies to tackle all three elements without help since they’re all incredibly complex subjects on their own. Apart from this, mergers and acquisitions have also played a massive role in expanding the TIC industry in recent years too by allowing them access into other markets and services fairly quickly. This makes it easier to meet consumer demands when you’re able to offer more under one roof.

Astute Analytica expects that predictive maintenance, smart devices, intuitive user interfaces, and especially cloud-based tools are likely to reshape the face of TIC market.

Key Findings in Testing, Inspection and Certification Market

Market Forecast (2032) US$ 376.5 Billion
CAGR 4.56%
Largest Region (2023) Asia Pacific (35.9%)
By Service Type Testing Services (61.6%)
By Solution Type In-House (57.2%)
By Application  Quality and Safety (58.8%)
By Industry Food and Beverage Processing Industry (22.9%)
Top Trends
  • Digitalization of TIC services through IoT, AI, and data analytics.
  • Growing emphasis on ESG compliance and sustainability verification.
  • Increase in remote and virtual inspections facilitated by technology.
Top Drivers
  • Strict regulatory requirements for product safety and quality.
  • Outsourcing of TIC services by businesses to ensure compliance and efficiency.
  • The need for interoperability testing due to the rise of interconnected devices and systems.
Top Challenges
  • Attracting and retaining skilled talent with digital expertise.
  • Adapting legacy systems and processes to the digital era.
  • Managing diverse portfolios and ensuring consistent quality across industries.

Independent ESG Verification: A Lucrative Opportunity for the TIC Market

As companies scramble to meet environmental, social and governance (ESG) criteria, the Testing, Inspection and Certification (TIC) market has a golden opportunity. ESG is growing in popularity as consumers, investors and regulators all demand greater transparency in business practices. It’s not just an increased chance of bad press companies are facing – they can also face major financial problems for not meeting standards or even legal ones if they break certain rules. But when businesses strive to improve their ESG ratings, they run the risk of ‘greenwashing’ – making false claims about sustainability – but that’s where TIC comes into play. TIC firms can independently verify statement on how environmentally friendly products are against established benchmarks to give them credibility and avoid accusations of greenwashing.

The ability to navigate the complex world of ESG is another skill that makes TIC so valuable. From identifying areas that need improving, aligning with best practices and developing strong strategies for hitting those ESG goals – being confused in this sector won’t fly. Incoming European regulations concerning ESG will put TIC front and center. The Non-Financial Reporting Directive (NFRD) and Corporate Sustainability Reporting Directive (CSRD), among others, have made it mandatory for companies to disclose information relating to their impact on the environment – but what many don’t understand is how they can go from point A: regulation; to point B: reliable reporting systems. TIC companies bridge this gap by interpreting regulations and providing independent assurance on ESG data. And since these firms have already proven themselves experts at sniffing out risks before it’s too late, they’ll also be valuable in helping companies spot potential reputational or legal risks resulting from failing to hit ESG goals proactively by examining operations, supply chains and stakeholder relationships.

Testing, Inspection and Certification (TIC) Market Analysis Highlighting Key Trends, Opportunities, and Market Dynamics

The TIC market is rapidly evolving, driven by technological advances, regulatory shifts, and changing market needs. Key areas of focus for TIC players include:

  • Digital Transformation: TIC companies are integrating IoT, AI, and blockchain to improve efficiency, accuracy, and transparency. Digital platforms are fundamentally reshaping how TIC services are delivered and consumed.
  • Specialized Services: Providers are tailoring offerings for sectors like automotive, healthcare, and energy. This ensures customized solutions and deep understanding of industry-specific regulations.
  • Cross-Border Trade Support: TIC services are witnessing rising demand for navigating complex global regulatory frameworks and trade agreements, streamlining international commerce.
  • Sustainability and ESG: The Testing, Inspection and Certification (TIC) market is expanding into environmental compliance and sustainability services, driven by the increasing demand for responsible business practices and adherence to ESG standards.
  • Cybersecurity Services: Increasing number of players have started offering penetration testing and vulnerability assessments, essential for protecting businesses against the rising tide of cyber threats.
  • Remote and Virtual Inspections: Rapid adoption of advanced technologies like drones, robotics, and augmented reality enabling remote assessments, increasing flexibility and reducing the need for physical site visits.

M&A Activity Transforms the TIC Market Landscape

The M&A activities across the global Testing, Inspection and Certification (TIC) market is booming. The sector’s strong regulation, recurring revenue models and high margins remain attractive to buyers, as do the relatively cheap valuations. Targets with sales above €30m are attracting double-digit multiples; those with sales below that mark are achieving 7-8 times EBITDA. Europe is an M&A hotspot in this segment, notably in the UK, Germany, France and Benelux and the Nordic countries.

As per Astute Analytica’s latest findings, the number of TIC company deals has doubled to between 200-300 a year past 2015; about 60% of them are cross-border acquisitions. Sector giants Eurofins has done more than 80 deals and SGS over 50. The interest from private equity acquirers is growing too. And while deal numbers dropped back by 16% year on year at the start of this year because of market caution amid fears about a coronavirus-driven downturn in activity, valuations have only eased slightly since last year. Wherein, strategic drivers for M&A in global Testing, Inspection and Certification (TIC) market include expanding geographic reach; adding services; acquiring digital capabilities; bolstering innovation; and scaling up for profitability. Buy-and-build strategies underpin growth across a range of sub-sectors such as food safety and materials testing relating to construction. Within those sectors highly sought-after areas include building & infrastructure, security & defense, health & safety, energy efficiency and food & pharma testing.

Valuations in TIC remain historically high with listed companies averaging around 16 times EBITDA – a near-record level – and transaction multiples having risen by between 10% and 20% in recent years. Higher borrowing costs could suppress some activity but demand remains resilient from both industry buyers and financial sponsors.

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Top Mergers and Acquisition Activities and their Impact on the Testing, Inspection and Certification (TIC) Market

Bureau Veritas Acquires ANCE S.A de C.V.

  • Bureau Veritas, a global leader in TIC services, acquired ANCE S.A de C.V., a Mexican leader in testing and certification for electrical and electronic products.
  • ANCE employs around 400 people and generated revenue of approximately €21 million in 2023.
  • This acquisition strengthens Bureau Veritas’ presence in the Americas and supports Mexico’s growth as a technology product exporter.

DEKRA Acquires a Company

  • DEKRA, a leading TIC company, made a significant acquisition in May 2023, although the details of the company acquired have not been specified.
  • DEKRA is known for leading the industry in automotive services.

SGS SA’s Acquisition of Herguth Laboratories

  • SGS SA, one of the leading TIC companies, acquired Herguth Laboratories, a provider of testing and certification services for the food and agricultural sectors in North America.

Bureau Veritas SA’s Acquisition of Shenzhen Total-Test

  • Bureau Veritas SA expanded its global reach by acquiring Shenzhen Total-Test, a Chinese company specializing in TIC services.

ALS Limited’s Acquisition of Truesdail Laboratories

  • ALS Limited, a global TIC company, acquired Truesdail Laboratories, a prominent provider of testing and certification services in the United States.

SGS Digicomply Now Wholly Owned by SGS Group

  • SGS acquired the remaining 49% stake in SGS Digicomply, a regulatory compliance solution powered by AI, becoming the sole owner.

Other Notable Tech M&A Deals Impacting the TIC Market

While not directly within the Testing, Inspection and Certification (TIC) market, the following tech M&A deals are significant due to their potential impact on the TIC sector, especially in areas related to digital transformation and cybersecurity:

Broadcom Completes VMware Acquisition

  • Broadcom Inc. completed the acquisition of VMware, valued at approximately $61 billion.

Cisco To Acquire Splunk

  • Cisco acquired the cybersecurity firm Splunk for $28 billion, which could have implications for TIC services in cybersecurity.

IBM Buys Apptio

  • IBM acquired Apptio Inc. for $4.6 billion to boost its FinOps and hybrid cloud offerings, which may influence TIC services in cloud computing.

Global Testing, Inspection and Certification (TIC) Market Key Players

  • ABS
  • ALS LIMITED
  • Apave International
  • Applus+
  • TUV SUD AG
  • BSI
  • Bureau Veritas S.A
  • DEKRA SE
  • DNV
  • Eurofins Scientific
  • MISTRAS Group
  • SAI Global
  • SGS S.A.
  • Intertek Group PLC
  • Other major players

Key Segmentation:

By Service Type

  • Testing
  • Inspection
  • Certification
  • Training
  • Consultancy

By Solution Type

  • In-house Services
  • Outsource Services

By Application

  • Quality and Safety
  • Production Evaluation
  • Industrial Inspection
  • System Certification
  • Others

By Industry

  • Agriculture & Forest
  • Building & Construction
  • Chemicals
  • Food & Beverage Processing
  • Oil and Gas
  • Energy & Utilities
  • Water & Wastewater
  • Education
  • Pharmaceuticals & Cosmetics
  • Automotive
  • Transport & Tourism
  • Others

By Region

  • North America
  • Europe
  • Asia Pacific
  • Middle East & Africa (MEA)
  • South America

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About Astute Analytica

Astute Analytica is a global analytics and advisory company which has built a solid reputation in a short period, thanks to the tangible outcomes we have delivered to our clients. We pride ourselves in generating unparalleled, in depth and uncannily accurate estimates and projections for our very demanding clients spread across different verticals. We have a long list of satisfied and repeat clients from a wide spectrum including technology, healthcare, chemicals, semiconductors, FMCG, and many more. These happy customers come to us from all across the Globe. They are able to make well calibrated decisions and leverage highly lucrative opportunities while surmounting the fierce challenges all because we analyze for them the complex business environment, segment wise existing and emerging possibilities, technology formations, growth estimates, and even the strategic choices available. In short, a complete package. All this is possible because we have a highly qualified, competent, and experienced team of professionals comprising of business analysts, economists, consultants, and technology experts. In our list of priorities, you-our patron-come at the top. You can be sure of best cost-effective, value-added package from us, should you decide to engage with us.

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