Target Information

Test Industry was established in 2017 with the aim of integrating two companies, Bimal S.r.l. and Leonardo S.r.l., which are active in the industrial testing sector. The goal is to build a leading global player in their industry by consolidating various entities.

The Group offers a wide range of products, including leak testing, strength testing, and dimensional control equipment designed for testing mechanical components, tires, and wheels specific to the automotive sector. Additionally, they provide impulse, burst, functional, and endurance testing solutions for industries such as heavy-duty automotive, agriculture, construction machinery, and aerospace.

Industry Overview

The industrial testing market in Italy is characterized by a diverse array of services tailored to meet the needs of various sectors, including automotive, aerospace, and agriculture. Companies compete by offering innovative testing solutions that ensure product reliability and quality. As technology evolves, so do the testing methods, leading to enhanced efficiency and accuracy in assessments.

Italy's strong manufacturing base in sectors like automotive and aerospace drives demand for advanced testing services. The push for higher quality standards and regulatory compliance has further augmented the importance of testing in production processes. Investment in cutting-edge testing technology is crucial for businesses to maintain competitiveness.

The market is also witnessing a trend towards automation and digitalization, with an increasing number of firms incorporating sophisticated testing software and machinery. These advancements are not only improving operational efficiency but are also leading to better data management and analysis, making testing processes more effective.

Moreover, the industrial testing landscape is fragmented, consisting of numerous small to medium-sized players. This presents opportunities for consolidation through mergers and acquisitions, enabling the creation of more comprehensive testing service providers capable of addressing client needs on a larger scale.

Rationale Behind the Deal

The investment rationale stems from the strategic objectives of achieving technological leadership and product excellence through the well-established brands of Leonardo and Bimal. The scalable business model serves as an ideal platform for a buy-and-build strategy aimed at consolidating a highly fragmented market and increasing global presence.

Long-term trends support the focus on product reliability, actual and perceived quality, and the performance demanded of industrial products, making testing an essential activity in both laboratory and production settings. Test Industry is well-positioned to capitalize on these trends.

Investor Information

The acquisition was led by IGI, alongside its partners GMN S.r.l. and Equilybra S.p.A. The investment structure includes the reinvestment of the founders from Leonardo and Bimal, indicating confidence in the business's future growth and synergy potential.

With a seasoned management team and a solid cash generation capacity, the investors are poised to implement strategic changes aimed at improving operational efficiencies and exploring further acquisition opportunities to enrich the Group's portfolio.

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This deal represents a strong investment opportunity due to the robust demand for industrial testing services driven by cutting-edge technology and regulatory requirements. The company's established leadership within the market positions it favorably for future growth through strategic acquisitions and enhancements to service offerings.

The ongoing trend of globalization and the fragmentation in the industry suggest a ripe landscape for consolidation. By leveraging their participation in M&A activities, the investors can effectively scale operations and increase market share, leading to enhanced valuation.

Moreover, Test Industry exhibits interesting profitability and cash generation capabilities, factors that will likely contribute to a successful exit strategy, either through a sale to an industrial operator or another financial entity.

Overall, the combination of experienced management, strategic market position, and the potential for growth through M&A makes this investment a prudent decision for the involved parties.

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