Trescal gears up for Asian expansion under new sponsor EQT – CEO

Interview 11 January

Trescal gears up for Asian expansion under new sponsor EQT – CEO

Trescal, the calibration services specialist recently acquired by EQT Infrastructure, is on the lookout for bolt-on acquisitions in Asia as it seeks to expand its footprint in countries such as China, South Korea, Thailand and Vietnam, CEO Guillaume Caroit told Mergermarket.

The Paris-based group is in advanced talks to make its first acquisition in China, expected to be inked before the end of this month, Caroit said, declining to name the target. Baring Private Equity Asia, which has been has been part of EQT [STO:EQT] since October, is to support the company with its M&A efforts in the region, he added.

The calibration expert also plans to gain a foothold in India by 2024, he said.

Outside Asia, the company will look at bolt-ons in North America, Brazil, Ireland, the Nordics and the Czech Republic, Caroit said, adding that it will reignite plans to enter Poland this year.

The plans see Trescal resume the M&A strategy Caroit unveiled to Mergermarket last June ahead of previous owner OMERSdeal to sell the business. The company wants to complete up to 20 bolt-ons per year until 2029, mainly targeting business with EUR 1m-12m revenue, while it could also consider targets of up to EUR 70m revenue, he said.

The acquisitions would enable Trescal, which has historically operated in the aerospace and defense sectors, to expand its offering in areas such as life sciences market process validation and qualification experts, he said. Around 75% of the deals will target calibration peers, he added.

The company also plans to strengthen its position in electronic components and semiconductors in the next five years, he said.

Trescal announced yesterday the acquisition of five peers based in South Korea, Scandinavia, Ireland, Australia and Malaysia, adding EUR 25m in sales to its 2022 revenues of EUR 500m, Caroit said.

Negotiations for the deals started before the company entered exclusive sale talks with EQT, he said. The takeover by EQT, expected to complete by May, will see the sponsor hold a majority stake with OMERS retaining around 20% in the business. The company’s management will hold 15-20%, with new managers planning to acquire a stake too, he added.

The Swedish sponsor has already prepared funding for potential acquisitions for the next two to three years, Caroit said, adding that Trescal will carry out its deals under OMERS control until the acquisition is closed.

The calibration expert mainly sources deals using its four-strong, in-house M&A team located in Paris, which will welcome a fifth person this year. Country managers are also approached for bolt-ons opportunities, he added.

Established in 2007 after Air Liquide [EPA:AI] sold its metrology division to Astorg Capital Partners, Trescal has close to 5,000 employees and plans to reach 10,000 by 2027, Caroit said. 

It has around 70,000 clients, including France’s Thales [EPA:HO], aerospace group Safran [EPA:SAF] and South Korean electronics manufacturer Samsung Electronics [KRX: 005930].

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