Sector spotlight: TICC services

Heightened business interest in TICC services creates a great opportunity for providers in the space. The extraordinary success of Phenna Group, which more than doubled EBITDA in just 18 months, illustrates what can be achieved when ambition gets a minority capital boost.

Testing, inspection, certification and compliance (“TICC”) services businesses have long served an important need, with increasing end-user demand driven by ageing infrastructure, mandated testing and inspection, new and evolving government regulations and industry standards — particularly in a post-Brexit environment in the UK. And while many industries suffered during the pandemic, firms in the TICC space saw demand increase, with valuations strongly boosted from mid-2020 onwards as the world became more attuned to prioritising health and safety — the hallmarks of TICC.

Of course different specialities have been impacted differently, with businesses providing TICC services to commercial aerospace businesses negatively impacted and those working with pharmaceuticals, life sciences and healthcare faring very positively. The variations by sector may drive providers’ own demand to diversify their offering, whether organically or through M&A.

The tailwinds propelling much of the industry helped the outstanding journey of Phenna, a global player in the TICC space, though there was more at play then a favourable backdrop. The ambitious Founder and CEO, Paul Barry, led his team on a breakneck-speed M&A journey which saw the firm make 23 acquisitions in just 18 months to create a global player of scale. All the acquisitions were part of a clear strategy of building out the core operating areas whilst augmenting the platform. They helped Phenna to expand geographically, whilst also taking the firm into new end-market sectors such as fire, cyber security, HSE and environmental.

Crucial to the pace and success of this growth was minority funding from Inflexion Partnership Capital, which Paul chose to support his plans in February 2021. “Inflexion’s genuine minority offering combined with the firm’s impressive experience in similar businesses made them the right partner,” Paul says of his decision. Having worked at large corporates for many years, he set up his own business to escape the red tape and bureaucracy he felt large companies entailed, and in April 2019 Phenna Group was born to consolidate the fragmented TICC market, one that Paul had worked in for over 15 years.

“We recognised that Phenna’s leadership team had created a strong platform to create a global leader,” recalls Inflexion Partner Mark Williams. “Our experience gained from other investments in the sector helped us to recognise the potential they could achieve, while our M&A expertise would serve their admirable ambition well,” he continues.

It’s what you know

This experience was put to excellent use, with 23 acquisitions in six countries undertaken together by Phenna during Inflexion’s investment. This was overlaid with the deep sector expertise, having previously worked with British Engineering Services (BES), Alcumus, and Cawood Scientific among other TICC investments. The growth journeys of these businesses have seen all become consolidators in their space.

“TICC businesses have great potential right now, with high repeatability and resilience providing a strong platform for M&A. There remain many highly fragmented pockets with a long runway for further consolidation,” says Mark.

BES started life as a carve-out from its listed parent, with Inflexion steering that complex process before embarking on a journey that included building a fully integrated back office, strengthening the team, and creating a best-in-class tech-enabled service with the help of Inflexion’s Digital team. The firm has also undertaken 10 acquisitions since the 2015 investment, and continues to grow with Inflexion’s backing.

Alcumus, another 2015 investment, also grew through M&A, with six strategic acquisitions helping to expand the business internationally, while management worked with Inflexion to build a new customer platform, improve its value proposition and strengthen its ESG framework. Alcumus was sold to Apax in 2022, which generated a 5.9x MoC, with Inflexion re-investing shortly thereafter for a minority stake.

Cawood was a 2017 investment which saw three acquisitions expand its service offering and geographic footprint, ultimately enhancing its scale, while investment into its technology and data optimisation helped to improve its customer offering and resource efficiency.  The business was sold to Waterland in 2019.

Phenna’s journey was similarly impressive, if in a shorter timeframe: just 18 months after the Inflexion minority investment, Oakley Capital purchased Phenna in a transaction valuing the business at over £1bn. Headcount had tripled and EBITDA more than doubled during Inflexion’s stewardship — dwarfing the firm’s already impressive 24% for average EBITDA growth during partnerships.

Ambitious businesses can grow faster with the right capital and expertise, with Inflexion’s flexible funding offering minority or majority capital and access to a sizable team to accelerate growth.

Isabelle Pagnotta, Partner

Buyouts and Partnership Capital
+44 (0)20 7487 9847


Mark Williams, Partner

Enterprise Fund
+44 7971 954 481