Test & Measurement Industry Update Q1 2025

Commentary

• While global TICC companies continue to manage through near-term challenges posed by tariffs, including increasing supply costs and the impacts of demand “pull-forward”, an evolving and increasingly dynamic global trade environment also presents opportunities over the medium- and long-term
  • These impacts demonstrate the essential and deeply embedded nature of TICC services across the global economy, with demand supported by non-discretionary regulatory and compliance requirements, product quality monitoring, and broader risk management, which have historically delivered consistent, non-cyclical growth
  • Well-positioned TICC providers are expected to capitalize on new opportunities as they support customers in addressing critical requirements across global supply chains, production environments, and evolving regulatory requirements, among others
• Stock price performance for the T&M sector has varied across sub-sectors in 2025 YTD as investors cope with broader, tariff-induced market volatility while assessing the longer-term impact of shifting global trade policies to companies
  • TICC service providers, both public and private, continue to demonstrate resiliency and growth as local service relationships are less impacted by tariffs and “TICC intensity” continues to increase across end markets
  • Instrumentation manufacturers are continuing to navigate an uncertain demand environment and working to proactive manage complex, dynamic supply chains based upon a shifting trade landscape
• Despite overall market volatility, soft demand due to post-covid pull forward, and economic uncertainty surrounding tariffs, the T&M sector experienced an increase in Q1 2025 M&A volume compared to early 2024, as the sector continues to demonstrate its resilience and defensibility
  • Demonstrated “all-weather” performance has driven substantial private equity interest while strategic buyers and PE-backed platforms continue to pursue aggressive inorganic growth
  • Continued momentum in Q1 2025 for “add-on” acquisitions by major consolidators and PE firms, particularly across the TICC services sector