Key Findings & Highlights:

QualiTest Group is primarily active in Israel, where it provides a wide range of services, predominantly software product testing. The company primarily services its clients onsite, together with the clients' software product development teams. Key clients include Intel (for testing future versions of operating systems on different devices), Microsoft, Google and Philips Healthcare (for testing embedded software on medical devices and X-ray equipment). NelsonHall estimates the headcount of QualiTest in Israel to be ~1k.

QualiTest has been pursuing an internationalization strategy, initially setting up offices in the U.S.; in 2006 it acquired a staffing firm named Ibase Consulting. QualiTest reoriented the activities of Ibase Consulting towards software testing, initially providing staff augmentation and staffing services then expanding into fixed priced contracts and, over time, multi-year managed testing services contracts. The company has been successful with its service mix rebalance; NelsonHall estimates that of its U.S. headcount of ~400, personnel is divided equally between staff augmentation, consulting, and managed testing services. QualiTest's U.S. operations have a different type of client base from its domestic market; in the U.S., the company derives ~50% of its revenues from the enlarged healthcare sector including health insurance providers and medical device manufacturers.

In 2012, QualiTest made three acquisitions in Europe; two in the Netherlands and one in the U.K.:

• The two acquisitions in the Netherlands were small and brought in an estimated 50 personnel. Facing continued difficult market conditions, QualiTest divested its local operations, and has continued addressing the country through an Indian delivery-based value proposition
• The U.K. acquisition of TCL was larger: ~135 personnel including ~70 in India, largely servicing local clients and offshore centers/captives of U.K. clients.

QualiTest has an ambitious growth strategy; it wants to derive 50% of its revenues from its international business by the end of 2015. The company is looking to achieve this growth in the U.S. and the U.K., largely through winning large to mid-sized managed testing services contracts, the majority involving delivery from India. This strategy is working; revenues doubled in 2013 in the U.S., and are expected to grow by a further 40% in 2014. QualiTest Europe has also started seeing growth in the U.K., driven by the ramp-up of several small managed testing services contracts.