Bureau Veritas Strengthens Strategy to Become Global Leader

Bureau Veritas has signed an agreement with Inspicios to acquire its subsidiary Inspectorate for £450 million ($663.6MM). The transaction is expected to be completed during 3Q 2010, upon clearance from the relevant competition authorities.

The acquisition of Inspectorate is a decisive step forward for Bureau Veritas, making it one of the world leaders in commodities testing and inspection. This acquisition gives a new dimension to the Group, doubling the size of its laboratory network (330 sites) and offering the largest range of services in the conformity assessment sector: Industry, Construction, Marine, Consumer Products, Commodities, Systems Certification, In-Service Inspection & Verification and Government Services. Following this acquisition, the Group will employ 46,000 people in more than 140 countries, with revenues of around €3 billion.

Frank Piedelièvre, Chairman and CEO of Bureau Veritas, stated, "This acquisition is a unique opportunity for Bureau Veritas. In addition to leadership positions in its seven businesses, Bureau Veritas now attains a critical size in the very promising commodities testing and inspection market, in which the Group will now become a key player. By integrating a company of Inspectorate's quality and reputation, we are extending our business portfolio and bolstering our international network in the US and most emerging economies. This is a major strategic move for the Group."

Neil Hopkins, CEO of Inspectorate, commented, "We are happy to join forces with a global leader and a reference within the industry. Bureau Veritas is the ideal partner for accelerating our development thanks to the strength of its network and its complementary technical expertise."

  • A transaction which positions Bureau Veritas among the top three global leaders in commodities testing and inspection, a global market with a potential estimated at over €5 billion, with promising growth opportunities
  • Highly complementary activities and geographical networks, bolstering Bureau Veritas' presence in high-growth economies
  • A transaction which enhances earnings per share from the first year, with strong room for further growth and margin improvement


The acquisition of Inspectorate meets three strategic objectives for Bureau Veritas:

  • It positions Bureau Veritas among the top three global players in a fast-growing market, serving major global accounts and offering additional opportunities in terms of both organic and external growth
  • It enables the Group to continue diversifying its business portfolio:
    • By penetrating the oil and petrochemical products market segment
    • By extending its position in the minerals market. Bureau Veritas' activities in this segment (built up via a string of acquisitions since 2007) are primarily focused on upstream (exploration and production) in a limited number of countries (including Australia, South Africa, Chile and Brazil) while Inspectorate's services are positioned further downstream, notably in international trade, with a more extensive international footprint
  • It consolidates the Group's international network in countries in which Bureau Veritas did not yet have critical size, particularly in the US and the UK, while considerably bolstering its presence in high-growth regions (such as Russia, India, Latin America, China, South-East Asia, Central Asia and the Middle East) where Inspectorate achieves about 45% of its revenue.

Bureau Veritas' experience and network will help to accelerate significantly Inspectorate's development, notably by extending Inspectorate's technical expertise throughout the Group's geographical network, by opening new laboratories in key regions, and by enlarging its service offering. In addition to these revenue synergies, synergies are expected from improved operating efficiency with the merger of the two organizations, notably through optimization of back-office functions, IT investments, procurement, and in offices and laboratories.


The transaction, representing an acquisition price of £450 million, will be financed via existing and newly negotiated credit lines. Following the acquisition, Bureau Veritas’ net debt is set to represent around 2x EBITDA, well below the Group's banking covenants.

The operation will have an accretive impact on earnings from 2010 (full-year impact of about 3% in 2010 and 4% in 2011, excluding synergies). Given growth opportunities and margin improvement potential, the operation is expected to create significant value for Bureau Veritas' shareholders, the mid-term objective being to align Inspectorate's operating margins to those enjoyed by Bureau Veritas.


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