Strategic M&A Dynamics in the Test & Measurement Sector: Navigating Extended Timelines and Strategic Flexibility in Technology Acquisitions

The test & measurement sector has emerged as a focal point for strategic M&A activity, driven by the need to adapt to rapidly evolving technological demands and market uncertainties. According to a report by PwC, global M&A volumes in the sector declined by 9% in the first half of 2025 compared to the same period in 2024, yet deal values surged by 15%, signaling a shift toward larger, more transformative transactions [1]. This trend underscores a broader industry pivot from transactional efficiency to value-driven acquisitions, where companies prioritize high-quality assets and innovative capabilities to future-proof their operations.

Extended Timelines: A Response to Macro Uncertainties

The current M&A landscape reflects a delicate balance between caution and urgency. Dealmakers are extending evaluation timelines to navigate geopolitical tensions, macroeconomic volatility, and regulatory complexities. For instance, the biopharma segment within health industries has adopted a "string of pearls" strategy, acquiring early- to mid-stage innovations to build resilient pipelines amid pricing reforms and tariff pressures [5]. This approach mirrors the test & measurement sector’s focus on incremental, high-impact acquisitions rather than large, speculative bets.

A prime example is the $35 billion proposed acquisition of Ansys by Synopsys, which aims to merge semiconductor design with system simulation capabilities. This deal, expected to close in mid-2025, exemplifies how extended timelines allow for rigorous due diligence in high-stakes, cross-sector transactions [3]. Similarly, Emerson’s $8.2 billion acquisition of National Instruments highlights the sector’s emphasis on long-term strategic alignment over short-term gains, as companies seek to strengthen semiconductor and electronics test capabilities [3].

Strategic Flexibility: Thematic Investments and Cross-Sector Synergies

Strategic flexibility has become a cornerstone of successful M&A in the test & measurement sector. McKinsey’s analysis of global M&A trends emphasizes the rise of thematic investments—targeted acquisitions aligned with megatrends such as AI, digital health, and energy transition [2]. For example, Keysight Technologies’ $1.5 billion acquisition of Spirent Communications and its $1 billion purchase of ESI Group demonstrate how firms are expanding into simulation software and high-speed Ethernet testing to address demand in automotive and aerospace sectors [3].

The camera module testing systems market further illustrates this trend. Projected to grow from USD 1,944 million in 2025 to USD 2,998 million by 2031 at a CAGR of 7.7%, this segment is fueled by AI-powered testing solutions and demand for high-quality modules in consumer electronics and autonomous driving [6]. Such growth underscores the importance of cross-sector synergies, where test & measurement firms leverage adjacent technologies to unlock new revenue streams.

The Path Forward: Mitigating Risks While Capturing Value

As the sector navigates extended timelines and strategic flexibility, companies must balance risk mitigation with agility. PwC’s mid-year 2025 outlook notes that dealmakers are increasingly adopting data-driven approaches to evaluate target portfolios, ensuring alignment with long-term innovation goals [1]. For instance, Teradyne’s acquisition of Quantifi for silicon photonics testing reflects a calculated move into cloud and AI networking, areas with high growth potential but requiring specialized expertise [3].

However, challenges persist. Regulatory scrutiny, supply chain disruptions, and valuation pressures remain critical hurdles. The health industries segment’s experience with cross-sector deals—such as integrating technology and consumer-centric care models—offers a blueprint for managing these risks through phased integration and stakeholder collaboration [5].

Conclusion

The test & measurement sector’s M&A dynamics in 2023–2025 reveal a strategic shift toward value-driven, thematic investments. By extending timelines for due diligence and prioritizing strategic flexibility, companies are positioning themselves to capitalize on high-growth areas like AI, semiconductors, and energy transition. As the sector continues to evolve, the ability to adapt to macro uncertainties while maintaining a focus on innovation will define the most successful acquirers.

Source:
[1] Global M&A industry trends: 2025 mid-year outlook [https://www.pwc.com/gx/en/services/deals/trends.html]
[2] Camera Module Testing Systems Market Outlook 2025-2032 [https://www.intelmarketresearch.com/camera-module-testing-systems-market-10058]
[3] Evolving Focus in Test & Measurement: Key M&A Moves Reshaping the Industry (2023–2025) [https://www.linkedin.com/posts/chleyah-wail_evolving-focus-in-test-measurement-key-activity-7333857866824499202-D_3n]
[4] Global M&A trends in health industries: 2025 mid-year ... [https://www.pwc.com/gx/en/services/deals/trends/health-industries.html]
[5] M&A Annual Report: Is the wave finally arriving? [https://www.mckinsey.com/capabilities/m-and-a/our-insights/top-m-and-a-trends]