Product

Solutions

Customers

Resources

Company

Solutions

Learn

Customers

Product

Company

Solutions

Learn

Customers

Product

Company

Key takeaways

The European laboratory services market comprises businesses that provide laboratory testing services. We segment the identified assets by end market into the following categories: generalists, medical, environmental and food


The European market has a fragmented long tail, though several actors dominate the landscape by leveraging Europe-wide coverage. Executives interviewed by Gain.pro foresee these industry giants continuing their cross-border consolidation strategies, mostly aimed at increasing service levels by ensuring customer proximity and quick turnaround times which, in turn, allow for more attractive price setting. Local niche specialists will continue to have a right to exist until reaching a certain size, at which point they will become interesting acquisition targets for large incumbents


Although sponsor-led interest in European laboratories has been high, investors must punch their weight by competing with price tags offered by large strategics they often cannot match. Strategic buy-and-build plays typically come hand-in-hand with experienced M&A teams and large cash reserves to rapidly seize acquisitive opportunities once they arise, leaving little room for financial sponsors to act. Primary drivers for investors are (i) the market’s historical growth trajectory and a promising outlook, (ii) the potential to roll up the long tail of smaller incumbents through a buy-and-build strategy and (iii) the resilient nature of lab testing services with numerous end-market applications


ESG pain points primarily relate to environmental issues. Enormous amounts of plastic waste are generated throughout the lab testing process to comply with ISO standards. Industry experts believe this is unlikely to change in the near future. Incumbents can somewhat limit their CO2 footprint by implementing plastic recycling programmes. Governance topics primarily relate to maintaining the quality of the analyses and results, as players feel demand pressure for increasingly shorter turnaround times

Company benchmarking

Market growth

Grand View Research (February 2021) forecasts the global clinical laboratory services market to reach ~$288.7bn by 2028 (+4.7% CAGR 2021-2028)

PwC (2021) expects the European in vitro diagnostics market to reach ~€27.4bn in 2024 (+6.5% CAGR 2020-2024). The global food safety testing market is anticipated to grow to ~$22.6bn by 2026 (+7.7% CAGR 2021-2026; Technavio, February 2022)

A director interviewed by Gain.pro foresees the European medical laboratory services market growing at ~2-5% YoY in the next 5 years. A European CEO (interview by Gain.pro) expects the market for environmental laboratory services to grow at ~14% annually in the medium term

Positive drivers

Further technological advancements in testing methodologies allow for (i) more complex tests to be performed in labs (e.g. DNA profiling) and (ii) reduced logistical costs through the introduction of point-of-care analyses that facilitate quicker turnaround times and decreased sample pollution (interviews by Gain.pro)

Direct-to-consumer testing trend backed by increasing outsourcing rates of testing services by hospitals and care facilities, ensuring a significant demand uptick for medical laboratory services in the years to come (interviews by Gain.pro; Bain & Company, March 2022)

Industry-wide underlying long-term growth drivers in the form of (i) increased regulatory requirements leading to more testing, (ii) an ageing EU population (~20.6% >65 years old in 2020; +3pp 2010-2020; European Commission, April 2022) driving demand for medical diagnostics, (iii) ongoing climate change requiring increased environmental testing and (iv) more food brands switching to private-label suppliers resulting in more quality and safety testing (interviews by Gain.pro)

Negative drivers

Persistent price pressure, especially in more regulated and commoditised markets where certification is a hygiene factor to do business. This is exacerbated in the medical testing segment, wherein players feel pressure from insurers and governments because of rising healthcare budget constraints (interviews by Gain.pro; KPMG, July 2018)

Emerging disruptive innovations (e.g. ‘micro labs’ with a smartphone extension) that allow end-users to perform tests independently and receive the results in just a few minutes. This development may curb the growth potential of traditional physical laboratories (interview by Gain.pro)

Ongoing shortage of qualified laboratory personnel, especially in northern Europe, will hamper growth and require incumbents to match the substantially higher salaries paid in adjacent industries (e.g. chemicals, oil and gas) or significantly invest in automation (interviews by Gain.pro)

Read the full report on Gain.pro

Laboratory services industry.

With the full report, you have access to…

Detailed assessments of the market outlook

Insights from c-suite industry executives

A clear overview of all active investors in the industry

An in-depth look into 51 private companies, incl. financials, ownership details and more.

A view on all 440 deals in the industry

ESG assessments with highlighted ESG outperformers

And much more!

Industry research

Industry research

Industry research

Laboratory services

Laboratory services

Laboratory services

In

In

In

Europe

Europe

Europe

Join the digital revolution in private market intelligence

Find, understand and track companies that matter to you.

Subscribe and stay in the loop

© 2023 Gain.pro, all rights reserved

Find, understand and track companies that matter to you.

Subscribe and stay in the loop

© 2023 Gain.pro, all rights reserved

Find, understand and track companies that matter to you.

Subscribe and stay in the loop

© 2023 Gain.pro, all rights reserved