Bridgepoint's Qualitest tipped as 2023 sale candidate amid sponsor interest

Charlie Taylor-Kroll , Josh O'Neill , Kezia Joseph and Gustav Hoejmark-Jensen
27 October 2022

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Qualitest, a UK-headquartered software testing company, is an expected sale candidate for next year by owner Bridgepoint, according to four sources familiar with the situation.

Advisors are positioning themselves for a potential sale of the AI-driven software testing and quality assurance specialist, three of the sources said. Sellside appointments have yet to be made, the four sources added.

A final decision has not been taken on the timing of a sale, although one of the sources suggested that a process to sell the business could take place as early as 1Q23. The timing could, however, extend to the second half of the year, another one added.

The company, which provides software testing in financial services, telecom, healthcare, insurance, tech, media, and utilities industries, has been tipped as an exit candidate for several months after attracting inbound interest from several large cap sponsors, a fifth source familiar with the situation said.

Qualitest makes annual EBITDA of between USD 80m-USD 100m, three of the sources, a sixth source familiar with the situation, and a banker following the situation said. The company generated revenues of USD 306m in the year to December 2021, a 63% increase from USD 188m recorded in the same period the year before, company accounts show.

The growth in the period was aided by both inorganic growth and a slate of acquisitions, including German IT consulting services provider Telexiom for an undisclosed fee in October 2021. Qualitest most recently acquired India-based software testing firm ZenQ in August this year for an undisclosed fee. The company has also acquired Chicago-based Olenick & Associates, Israel-based quality assurance platform Comply, and India-based software testing platform QA Infotech.

Qualitest was acquired from Marlin Equity Partners by Bridgepoint's EUR 5.7bn (USD 5.6bn) flagship fund BE VI in October 2019, and had estimated deal value of USD 420m, according to Dealogic data. Marlin was advised by Jefferies and GCA Altium, while the acquirer used Raymond James for its approach.

Founded in 1997, Qualitest has operations in the US, UK, Germany, Romania, Israel, Argentina, Mexico, and Portugal, and serves over 250 customers worldwide, according to a company press release.

Bridgepoint declined to comment. Qualitest did not respond to requests for comment.