Testing Specialist Eurofins on the Acquisition Trail

Eurofins has emerged as one of the most interesting new names in the world of software testing.

The €3.4bn-revenue Belgian company actually has a 30-year history in running a network of more than 400 laboratories around the world where it provides testing and support services for the pharmaceutical, life sciences and consumer product goods industries.

But in the last year it has made its mark in the software space, with its Eurofins Digital Testing division announcing a trio of acquisitions. In the UK, it added 250 staff with a swoop for Edge Testing, one of the country’s largest specialist testing shops, and a further 70 employees with the purchase of cyber player Insite Security.

On the other side of the Atlantic, Eurofins snapped up 80-strong firm My Eye Media, and PAC recently caught up with Johan Craeybeckx, the head of the Eurofins Digital Testing , to understand the company’s place in the market.

The My Eye Media purchase is the one acquisition out of the three that is closest to Eurofin’s historical positioning in technology testing. The target company is focused on helping organisations in the movie industry – including studios, satellite and cable operators and streaming providers such as Netflix - to provide localised content testing services.

The origins of the Eurofins Digital Testing business can be traced back to the 2015 merger between Digital TV Labs and Testronic Labs Belgium and the majority of the c600 employees in the operation continue to be focused on electronics consumer device testing, with digital video platforms the primary area of activity. Other key customers include Com Hem, Conax, Freesat, Freeview, Kabel Deutschland, Liberty Global, Sky Deutschland, and others. 

The company is increasingly encroaching into the IoT space, where testing is emerging as a major challenge. Craeybeckx said that the fragmented consumer IoT space is home to a lot of small companies that do not have large budgets for quality assurance. However, it is working as an authorised testing partner for a leading personal assistant platform, and the company is growing its test activities around machine-to-machine and connected medical devices. The company also sees big potential in other areas such as testing the cyber resilience of solar panels as they become connected to power grids, with the threat that they could be hacked to return power to the grid at the same time, causing an outage.

Craeybeckx is among those that believe that the software testing industry is undergoing a major shift away from manual approaches towards automation. Eurofins is addressing this with its TestWizard tool, which is designed to act as an orchestration layer that sits between different third party automation tools.

It is a time of increasing consolidation in the software testing sector that has seen Israel’s Qualitest emerge as the world’s largest specialist testing services firm through a string of takeovers in the UK and the US, taking on the mantle from long-term rival SQS, which was snapped up by France’s Assystem at the start of the year.

Eurofins will continue to be a consolidator, as it aims to take its group sales past the €4bn mark in 2019 according to recent financial disclosures. It expects acquisitions to contribute around €200m in revenue in each of the next two years, and has a stated target of building a leadership position in each area in which it acquires – something it has already achieved in areas such as food and feed testing, bio-pharmaceutical product testing and in digital forensics testing. 

Craeybeckx states that Eurofins has similar ambitions in the technology testing space. While it would face strong competition from the large offshore players in the enterprise software testing segment (the main focus of the acquired Edge Testing business), Eurofins’ heritage in digital device testing gives it a platform to carve out an interesting position in IoT.