What PE and TIC Organizations Miss When Acquiring Companies
Many acquisitions underperform because diligence focuses too narrowly on financial metrics. In both private equity and TIC organizations, real value depends on understanding operational readiness, capacity, and culture. AST Consulting & Advisory outlines how aligning people, strategy, finance, and process drives stronger post-acquisition outcomes.
Adam Tocco
11/6/20251 min read
In many transactions diligence focuses heavily on financials and market trends while operational and technical factors receive less attention. In the Testing, Inspection and Certification (TIC) sector this can lead to missed value and slower returns.
The assumption that 1 + 1 automatically equals 3 after an acquisition rarely holds true. The actual outcome depends on integration readiness and alignment between people, process and strategy. When acquiring a bespoke independent lab not yet part of a larger platform it is critical to understand the fundamentals: market CAGR, capacity utilization and the stability of key technical talent following acquisition. These metrics often tell a clearer story about future performance than headline EBITDA multiples. At AST Consulting & Advisory we view diligence through four essential lenses: People, Strategy, Finance and Process. Each must be healthy and cohesive for an acquisition thesis to hold.
When a lab is integrated into an existing platform the risks change. Overlapping capacity in the same region can cause cannibalization as customers seek alternatives from the competition, which leads to margin erosion and internal competition between facilities that once operated independently. Overly rapid system alignment or process standardization can also disrupt the culture and “secret sauce” that originally made the business successful.
In all scenarios pro forma financials and future projections should be scrutinized closely and the purchase price amended accordingly if new risks are uncovered. It is rare for a company to outperform the sell-side forecast, as many operational, cultural and market factors must align perfectly for the plan to hold.
Sustainable value creation depends on measured integration that balances preservation with improvement. In the TIC sector and beyond the difference between 1 + 1 equaling 3 or 1.5 often comes down to disciplined execution and respect for the people and operating culture being acquired.
About AST Consulting & Advisory
AST supports investors and operators with diligence, integration and operational excellence initiatives across the automotive, energy and testing sectors.