Electronics Production | May 02, 2012
M&A EMS market recovers steadily
Nine completed merger and acquisition (M&A) transactions were recorded in 1Q/2012, continuing the steady recovery in M&A activity from a low in 3Q/2011.
The continued economic and credit market improvements, combined with the general market need to deploy cash, is driving M&A reports the analyst firm Lincoln International. EMS consolidations remained the most active type of transactions with 5 recorded transactions (representing 56%). "This highlights the desire for EMS companies to continue to build stronger platforms through acquisition". There were two vertical / horizontal convergences in Q1 2012, up from one in Q4 2011. "The level of vertical / horizontal convergences was up from the previous quarter as companies outside of the 'pure play' EMS industry renewed their interest in EMS and expanded horizontally". 1Q/2012 also had the first EMS divestiture in the last four quarters. In addition, there was one private equity transaction for the second quarter in a row. Transactions by size for the quarter were led by the Mid Tier, totaling four, or 44%, of all transactions. There were two Large Tier transactions and three Small Tier transactions - approximately 22% and 33% of the total, respectively.