A certification body is often its founder’s life’s work: years of accreditation assessments, auditors qualified one sector scope at a time, and clients who return for surveillance and recertification audits cycle after cycle. When a buyer asks to acquire it, what the owner receives depends on how many credible buyers compete for the business, and in certification there are many: 75 different buyers have bought certification bodies since 2015. This page sets out what certification bodies have sold for, how they compare with inspection firms and testing laboratories, the main kinds of certifier, and the groups buying them.<\/p>
A certification body audits a client’s management system, product, process or staff against a published standard and, when the client conforms, issues a certificate. Management system certificates run on a three-year cycle: an initial audit, a surveillance audit in each of the following two years and a recertification audit before the certificate expires. Product, food and organic schemes set their own surveillance and renewal audits. A client that keeps its certificate pays for audits every year, which is why buyers treat the revenue as recurring.<\/p>
Ownership is fragmented, and it is consolidating, so a well-run body can draw several buyers into a process. We count 194 acquisitions of certification bodies since 2015, made by 75 different buyers, with targets in 34 countries. The pace has picked up, from 67 deals in 2015 to 2020 to 127 since 2021. Private equity firms or their platforms made 41% of the deals, rising from 30% in 2015 to 2020 to 46% of those since 2021.<\/p>
Of the 194 deals, 27 disclose a value and 7 publish both EV and EBITDA, of which we use 5 (see Methodology). Their median is 11.8x EBITDA<\/strong>, and 7 deals give a median of 2.0x revenue<\/strong>. That puts certification a little above inspection at 9.5x EBITDA, testing laboratories at 10.1x and our all-TIC median<\/a> of 9.9x EBITDA (54 deals) and 1.8x revenue (142 deals), with a median deal size of $13.4M (282 deals) across 2,841 TIC deals.<\/p> The table sets certification bodies beside the two other parts of TIC, with each target counted once, in the group that matches its main business. Buyers usually apply the EV\/EBITDA multiple to adjusted EBITDA, normalized for one-off items and owner costs.<\/p>Certification Compared With Inspection and Testing<\/h2>