SGS Acquires ATS for $1.3 Billion, Expanding North American Market Presence
- SGS acquires Applied Technical Services (ATS) for USD 1,325 million to enhance its North American testing and inspection capabilities.
- The acquisition is expected to generate USD 460 million in sales and USD 95 million in EBITDA by 2026.
- ATS integration aims for USD 30 million in annual EBITDA synergies, supporting SGS's growth strategy to double North American sales.
SGS Expands Footprint in North America with ATS Acquisition
In a strategic maneuver to bolster its presence in North America, SGS, the leading global testing, inspection, and certification company, announces its definitive agreement to acquire Applied Technical Services (ATS). This acquisition, valued at USD 1,325 million, positions SGS to significantly expand its suite of specialized Testing, Inspection, Calibration, and Forensics solutions. With ATS’s nearly 60 years of industry experience and a workforce of 2,100 professionals across 85 facilities in the U.S., the deal is expected to generate USD 460 million in sales and USD 95 million in EBITDA in 2026, reinforcing SGS’s capabilities in high-growth sectors such as Manufacturing, Aerospace & Defense, and Power Generation & Distribution.
The strategic integration of ATS is poised to enhance SGS's operational efficiencies and revenue streams. SGS projects an additional USD 30 million in annual EBITDA synergies within three years, achieved through cost rationalization and cross-selling opportunities. This move aligns with SGS's broader objective to more than double its sales in North America by 2027 compared to 2023, positioning the company to elevate its annual sales in the region to over USD 1.5 billion. CEO Géraldine Picaud emphasizes that this acquisition is a cornerstone of the company’s Strategy 27, designed to drive sustainable growth and deliver long-term value to shareholders.
The acquisition is set to close by late 2025 or early 2026 and is anticipated to be accretive to earnings per share from the first year. With an 11.2 times multiple of the expected 2026 EBITDA, the transaction underscores the robust market potential that ATS brings to SGS. The strategic alignment of both companies is expected to create a more competitive entity capable of delivering comprehensive solutions and enhancing service offerings across multiple sectors.
In addition to the expected financial benefits, the acquisition reflects a growing trend of consolidation within the testing and inspection industry, which is increasingly characterized by the need for operational efficiency and expanded service capabilities. As SGS continues to enhance its portfolio, the integration of ATS not only strengthens its North American market position but also serves to meet the evolving demands of its diverse client base.
SGS’s commitment to innovation and excellence is exemplified through this acquisition, which is anticipated to solidify its leadership in the testing and inspection sector while addressing the specific needs of high-growth industries. As the transaction progresses toward completion, stakeholders remain optimistic about the potential for enhanced operational performance and market expansion.