SGS, a leading global testing, inspection and certification (TIC) company headquartered in Geneva, Switzerland, has announced the acquisition of SYNLAB Analytics & Services (A&S), a leading European environmental, food testing and tribology services company. Currently, A&S is a division of SYNLAB, the leading medical diagnostic services provider in Europe.
“The acquisition of A&S significantly strengthens our global network in key strategic focus areas, including environment, food, life sciences and oil condition monitoring. This important strategic move, combined with the strong operational progress so far in H2, confirms the next stage of our strategic evolution which will further align SGS to higher value-added services and to the key TIC megatrends,” said Frankie Ng, CEO of SGS.
In 2019, A&S generated revenues of EUR202 million (USD239.7 million) and adjusted EBITDA of EUR34 million (USD40.3 million). A&S has approximately 2,000 employees. Organic revenue growth was 5.8% in 2019 and, despite the impact from Covid-19, was 0.3% in the first half of 2020.
A&S generated approximately 60% of 2019 revenues in environmental testing, 20% in food testing, 10% in life sciences testing and 10% in oil condition monitoring. Regionally, the acquisition enhances SGS’s market position in Northwestern Europe, by strengthening its presence especially in Germany and Benelux, as well as enabling it to enter new attractive markets in the Nordics. Acquiring A&S is strongly aligned with its strategic objective of accelerating mergers and acquisitions (M&A) in attractive, high growth sectors with scope for automation and digitisation.
The purchase consideration is expected to be approximately EUR550 million (USD652 million) and will be fully funded from existing financial resources. The transaction is subject to customary regulatory approvals and is expected to close by the first quarter of 2021 at the latest. The combination of A&S with SGS’s European laboratory network will accelerate the adoption of a hub-and-spoke model, creating a more comprehensive range of services and generating strong operating synergies.