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© milan jurkovic dreamstime.com Analysis | November 19, 2013

M&A activities still declining

There were four completed transactions reported for Q3/2013. The four transactions represent a decrease in M&A activity compared to Q2/2013.
Announcements
  • Wright Industries, Ltd. has acquired Custom Interconnect, Inc. (September-30)
  • Nittoku Denshi Co., Ltd., a subsidiary of NGK Spark Plug Co., Ltd., has acquired Ohens Co., Ltd. (September-9)
  • Nistec Ltd. has acquired a majority stake in Eltek Ltd. (August-19)
  • OSI Electronics, a subsidiary of OSI Systems, Inc., has acquired Briton EMS (August-1)
M&A activity fell off in the first half of 2013 after a sharp rise in Q4 2012 as several transactions were closed prior to the year end in 2012. "M&A activity in the EMS industry would need to have a stronger Q4 than last year to avoid a decrease in annual transactions for the third straight year", writes analyst firm Lincoln International.

EMS consolidations represented one transaction (or 25.0% of total activity in Q3 2013), down from two in Q2 2013. The number of vertical/horizontal integrations remained consistent from the previous quarter with two transactions in Q3 2013. Private equity activity in the EMS sector remained consistent with one deal in both Q3 and Q2 2013. There were no OEM divestitures or EMS divestitures in Q3 2013.

One European transaction occurred between two UK companies in Q3 2013, representing 25.0% of total activity, a decrease of one transaction from the previous quarter. Cross-border transactions between high-cost countries presented another 25% of the activity in Q3 2013 with one transaction, remaining consistent with the one transaction in Q2 2013. There was one transaction made between two Japanese companies. Finally, one transaction occurred between two Israeli companies this quarter, representing 25.0% of total activity.

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