diff --git a/Tests/UnitTests/Examples/Algorithms/CMakeLists.txt b/Tests/UnitTests/Examples/Algorithms/CMakeLists.txt
new file mode 100644
index 00000000000..68400c2d538
--- /dev/null
+++ b/Tests/UnitTests/Examples/Algorithms/CMakeLists.txt
@@ -0,0 +1 @@
+add_subdirectory(Digitization)
diff --git a/Tests/UnitTests/Examples/Algorithms/Digitization/CMakeLists.txt b/Tests/UnitTests/Examples/Algorithms/Digitization/CMakeLists.txt
new file mode 100644
index 00000000000..651996e51d1
--- /dev/null
+++ b/Tests/UnitTests/Examples/Algorithms/Digitization/CMakeLists.txt
@@ -0,0 +1,3 @@
+set(unittest_extra_libraries ActsExamplesDigitization)
+
+add_unittest(ModuleClusters ModuleClustersTests.cpp)
diff --git a/Tests/UnitTests/Examples/Algorithms/Digitization/ModuleClustersTests.cpp b/Tests/UnitTests/Examples/Algorithms/Digitization/ModuleClustersTests.cpp
new file mode 100644
index 00000000000..5503d2d466c
--- /dev/null
+++ b/Tests/UnitTests/Examples/Algorithms/Digitization/ModuleClustersTests.cpp
@@ -0,0 +1,92 @@
+// This file is part of the Acts project.
+//
+// Copyright (C) 2023 CERN for the benefit of the Acts project
+//
+// This Source Code Form is subject to the terms of the Mozilla Public
+// License, v. 2.0. If a copy of the MPL was not distributed with this
+// file, You can obtain one at http://mozilla.org/MPL/2.0/.
+
+#include <boost/test/unit_test.hpp>
+
+#include "Acts/Utilities/BinningData.hpp"
+#include "ActsExamples/Digitization/ModuleClusters.hpp"
+#include "ActsFatras/Digitization/Channelizer.hpp"
+
+using namespace Acts;
+using namespace ActsFatras;
+using namespace ActsExamples;
+
+namespace {
+
+DigitizedParameters makeDigitizationParameters(const Vector2 &position,
+                                               const Vector2 &variance,
+                                               const BinUtility &binUtility) {
+  auto [binX, binY, _] =
+      binUtility.binTriple((Vector3() << position, 0).finished());
+  Channelizer::Bin2D bin = {(Channelizer::Bin2D::value_type)binX,
+                            (Channelizer::Bin2D::value_type)binY};
+  Channelizer::Segment2D segment = {position, position};
+  double activation = 1;
+  Cluster::Cell cell = {bin, segment, activation};
+
+  Cluster cluster;
+  cluster.sizeLoc0 = 1;
+  cluster.sizeLoc1 = 1;
+  cluster.channels = {cell};
+
+  DigitizedParameters params;
+  params.indices = {eBoundLoc0, eBoundLoc1};
+  params.values = {position.x(), position.y()};
+  params.variances = {variance.x(), variance.y()};
+  params.cluster = {cluster};
+
+  return params;
+}
+
+auto testDigitizedParametersWithTwoClusters(bool merge, const Vector2 &firstHit,
+                                            const Vector2 &secondHit) {
+  BinUtility binUtility;
+  binUtility +=
+      BinningData(BinningOption::open, BinningValue::binX, 20, -10.0f, 10.0f);
+  binUtility +=
+      BinningData(BinningOption::open, BinningValue::binY, 20, -10.0f, 10.0f);
+  std::vector<Acts::BoundIndices> boundIndices = {eBoundLoc0, eBoundLoc1};
+  double nsigma = 1;
+  bool commonCorner = true;
+
+  ModuleClusters moduleClusters(binUtility, boundIndices, merge, nsigma,
+                                commonCorner);
+
+  moduleClusters.add(makeDigitizationParameters(firstHit, {1, 1}, binUtility),
+                     0);
+  moduleClusters.add(makeDigitizationParameters(secondHit, {1, 1}, binUtility),
+                     1);
+
+  return moduleClusters.digitizedParameters();
+}
+
+}  // namespace
+
+BOOST_AUTO_TEST_SUITE(DigitizationModuleClustersTests)
+
+BOOST_AUTO_TEST_CASE(digitizedParameters_merging) {
+  // overlapping hits are expected to be merged if turned on
+  {
+    auto result = testDigitizedParametersWithTwoClusters(true, {0, 0}, {0, 0});
+    BOOST_CHECK_EQUAL(result.size(), 1);
+
+    result = testDigitizedParametersWithTwoClusters(false, {0, 0}, {0, 0});
+    BOOST_CHECK_EQUAL(result.size(), 2);
+  }
+
+  // non overlapping hits are not expected to be merged
+  {
+    auto result = testDigitizedParametersWithTwoClusters(true, {0, 0}, {5, 0});
+    BOOST_CHECK_EQUAL(result.size(), 2);
+
+    result = testDigitizedParametersWithTwoClusters(false, {0, 0}, {5, 0});
+    BOOST_CHECK_EQUAL(result.size(), 2);
+  }
+}
+
+BOOST_AUTO_TEST_SUITE_END()
diff --git a/Tests/UnitTests/Examples/CMakeLists.txt b/Tests/UnitTests/Examples/CMakeLists.txt
index fd13a837780..e275a2da86a 100644
--- a/Tests/UnitTests/Examples/CMakeLists.txt
+++ b/Tests/UnitTests/Examples/CMakeLists.txt
@@ -1 +1,2 @@
-add_subdirectory_if(Json ACTS_BUILD_PLUGIN_JSON)
+add_subdirectory(Algorithms)
+add_subdirectory(Io)
diff --git a/Tests/UnitTests/Examples/Io/CMakeLists.txt b/Tests/UnitTests/Examples/Io/CMakeLists.txt
new file mode 100644
index 00000000000..fd13a837780
--- /dev/null
+++ b/Tests/UnitTests/Examples/Io/CMakeLists.txt
@@ -0,0 +1 @@
+add_subdirectory_if(Json ACTS_BUILD_PLUGIN_JSON)
diff --git a/Tests/UnitTests/Examples/Json/CMakeLists.txt b/Tests/UnitTests/Examples/Io/Json/CMakeLists.txt
similarity index 100%
rename from Tests/UnitTests/Examples/Json/CMakeLists.txt
rename to Tests/UnitTests/Examples/Io/Json/CMakeLists.txt
diff --git a/Tests/UnitTests/Examples/Json/JsonDigitizationConfigTests.cpp b/Tests/UnitTests/Examples/Io/Json/JsonDigitizationConfigTests.cpp
similarity index 100%
rename from Tests/UnitTests/Examples/Json/JsonDigitizationConfigTests.cpp
rename to Tests/UnitTests/Examples/Io/Json/JsonDigitizationConfigTests.cpp