Industry Research: March 2025
Updated: May 14, 2025
This article provides an update on Netropy Partners’ ongoing research into industries that are attractive for investment.
Within these industries we will source potential acquisition targets that score well against the following criteria, making them suitable for further analysis and outreach to owners.
Financial | Business |
▪ Recurring, re-occurring and contractual revenue ▪ Annual revenues over £5M ▪ Annual EBITDA over £1M ▪ Cash flow positive for multiple years ▪ Low cyclicality ▪ Low ongoing capital expenditure requirement | ▪ Strong middle management ▪ Private and concentrated ownership ▪ Motivated seller ▪ Opportunity to add value ▪ Low customer concentration and churn |
Case studies are based on actual companies; however these are not all actively being marketed for sale. While some of the companies described are being approached, the aim of this document is to provoke discussion about compelling industries to further this research.
Scientific Testing
UK government has pledged to increase investment to propel both the life sciences and manufacturing sectors’ contribution to the economy. As such, demand for technical testing and analysis should expand, fuelling revenue growth.
These product and service providers are characterised as being specialist in nature, dependable and with high levels of customer service. These important qualities reward providers with good profit margins and long-standing relationships. For life science companies, switching suppliers is an unnecessary distraction given their relatively small part of their costs and the fact that purchasing decisions are often made by scientific staff for reasons of technical suitability and convenience rather than price.
There is a strong track record of M&A amongst scientific services providers with several private and public companies investing heavily:
Calibre Scientific (investor.calibrescientific.com/news)
Judges Scientific (https://www.judges.uk.com/our-businesses.html)
SDI Group (https://sdigroup.com/portfolio/)
Example company (proprietary search)
A company established in 1997 offering sales, hire/lease and service & support for environmental chambers of all types. This includes carrying out testing for R&D or compliance as well as providing test equipment via sale or hire, and providing servicing and maintenance of this equipment. They also provide accredited in-house testing services, serving all industry sectors.
FY2024 revenue £5.1M (est), EBITDA £1.0M (est). 16 employees including dedicated sales and test staff. The company founder, aged 72, remains the large majority shareholder.
Strengths | Weaknesses |
▪ Niche industry with knowledge barrier to entry ▪ Longstanding customer relations ▪ One founder/owner at retirement age ▪ Diverse customer base including scientific testing, university labs, fire testing, battery technology, renewable energy systems. ▪ Recurring revenue from equipment hire and servicing ▪ Multiple profit centres (equipment resale, equipment servicing, contract testing) ▪ Proximity to major scientific hub of Cambridge/London | ▪ UKAS accreditation must be maintained for testing services ▪ Key person risk – servicing manager in post since company formation |
Opportunities | Threats |
▪ Invest in better marketing of products and services ▪ Rationalise product range | ▪ Changes in legislation/regulations reducing need for testing ▪ Increased competition |
Laboratory removal services
Specialist services for moving delicate scientific equipment and sensitive materials, either as a complete laboratory relocation or occasional one-off jobs.
A highly fragmented industry with many small, geographically limited players – however, some national general removal firms are now beginning to invest in developing specific laboratory removal services.
Medium high barrier to entry requiring some capital investment in vehicles, logistics systems and storage facilities (which can be in lower cost areas) along with some knowledge of life science processes and equipment.
The industry shares some characteristics with general domestic removals (labour cost, EBITDA margins); however its growth rate is more closely aligned with employment and commercial real estate transactions.
Example company (proprietary search)
A company established in 2001 providing scientific companies with range of services including relocations, storage, recycling and white glove deliveries of scientific equipment.
FY2024 revenue £4.0M (est), EBITDA £0.8M (est), 38 employees including management team. The company founder, aged 62, remains the sole shareholder.
Strengths | Weaknesses |
▪ Longstanding customer relations ▪ Essential business service ▪ Proximity to major scientific hub of Cambridge/London and eastern ports. ▪ Multiple profit lines (removals, insurance, storage) | ▪ Mostly project-based revenue ▪ Limited international reach ▪ Requires additional labour to scale |
Opportunities | Threats |
▪ Exploit existing warehouse & transportation infrastructure to provide new service lines eg: - Waste removal & recycling - Equipment hire eg freezers - Deliveries of scientific consumables - Equipment installation & commissioning ▪ Expand geographic reach via M&A | ▪ Competition from well-funded national players eg Harrow Green Restore ▪ Increasing cost base eg business rates, employment taxes, fuel |
Workplace environmental monitoring
Largely driven by the essential need to comply with environmental laws and regulations, this industry is relatively resilient to change. However, new market opportunities are emerging as technological advancements, including wireless and AI-powered detection systems, are enhancing real-time monitoring and accuracy. Increasing awareness of workplace safety, coupled with rising investments in industrial automation and smart infrastructure, is further fuelling market demand.
The growing adoption of portable and fixed gas detection systems in residential and commercial sectors is contributing to this market's expansion.
The industry is shifting toward smart, connected gas detection devices that provide real-time monitoring, remote alerts, and predictive maintenance. As these devices are connected this opens up new business models including cloud data services and subscription-based device placement.
Example company (proprietary search)
A company established in 1995 that supplies, installs and services a wide range of portable and fixed gas detection equipment for safety and environmental monitoring, particularly in workplaces. It does not have its own products but hires and sells those from large manufacturers.
FY2024 revenue £4.2M (est), EBITDA £0.5M (est), 21 employees who are mostly remote throughout the UK. The company founder, aged 72, remains the majority shareholder.
Strengths | Weaknesses |
▪ Diverse base of over 600 customers across 1,500 install sites ▪ Longstanding customer relationships including some leading multinationals ▪ Recurring revenue through service and maintenance contracts ▪ Relatively small proportion of customers’ costs | ▪ Remotely distributed team of installers may require close management ▪ Lumpy profitability needs to be understood in detail ▪ Requires accreditation to various trade bodies |
Opportunities | Threats |
▪ Improved marketing of products and services ▪ Implement cloud data services to aid customer retention ▪ Move towards subscription model | ▪ Competition from larger players |
Specialist component manufacturing
Industrial lamp component manufacturing is a niche industry where specialist knowledge and manufacturing process provide a competitive advantage that drives longstanding customer relationships. Typically serving international OEMs, winning manufacturing contracts often results in many years of continued sales.
Xenon and Krypton lamps are used in
Medical aesthetics (eg laser skin treatment)
Decontamination/sterilisation
Automotive lighting
Semiconductor industry
Agriculture (to stimulate plant growth)
Commercial lighting (eg projectors)
Growth of the industry is linked to the growth of those it serves. By addressing a diverse mix of customers and remaining more agile than multinational incumbents (Osram, Philips, XENON), companies should enjoy continued growth.
Example company (proprietary search)
A company established in 2004 that manufactures specialist lamp components for medical and industrial OEMs. Along with its own range of products it can manufacture bespoke components.
FY2024 revenue £8M (est), EBITDA £1M (est), 94 employees including a well-established management layer. The company is 50% owned by two managers approaching retirement age and 50% held opportunistically by a venture capital fund for many years, who may now be motivated to liquidate their investment.
Strengths | Weaknesses |
▪ Long trading history ▪ Good history of profitability ▪ Export sales via international distributors ▪ Recent investments in process optimisation and marketing | ▪ Ongoing R&D investment likely to be required ▪ Mix of one-off and repeat business (partly mitigated by multi-year supply contracts) ▪ |
Opportunities | Threats |
▪ Expansion to serve new industry sectors and reduce dependence upon medical aesthetic equipment manufacturers ▪ Vertical integration with suppliers & related component manufacturers | ▪ Lower-priced competition from overseas ▪ Legal challenge over patented products |
Industrial spill control equipment supplier
The industrial spill control industry focuses on providing products and services to prevent, contain, and clean up spills of hazardous and non-hazardous materials. This includes proactive products (safety equipment, containment products) and emergency products (spill kits, cleanup, waste removal).
Reasons to purchase products include legislation and risk management as well as the practical benefits of avoiding costly waste problems.
Example company (proprietary search)
A company established in 1998 that manufactures its own range of spill kits, containment trays and industrial wet wipes for cleaning hands and tools. Most products are B2B with the wet wipes being B2B2C, sold through national retailers.
FY2024 revenue £8.4M (est), EBITDA £1M (est), 75 employees including a management layer. The company is owned by three people (two of which are management), all at retirement age.
Strengths | Weaknesses |
▪ Low customer concentration ▪ Market leader in a niche industry ▪ Multiple profit centres ▪ Long trading history | ▪ Potential price competition |
Opportunities | Threats |
▪ Move to online purchasing ▪ Improve marketing and possible rationalise product range ▪ Develop wet wipes as a standalone brand ▪ Become listed by national ‘trade’ retailers ▪ Explore export options | ▪ Changes in legislation ▪ Lower-priced competition from overseas |