© aydindurdu-dreamstime.com Electronics Production | May 09, 2013
EMS: M&A down yet again
There were seven completed transactions in Q1 2013. The seven transactions represent a drop in recent M&A activity compared to eleven transactions in the previous quarter.
However, the level of transaction activity is still exhibiting a higher run rate of transaction volume than what was completed in 2012. EMS consolidations were down from last quarter, representing two, or 29% of Q1 2013 transactions, compared to six in Q4 2012. There were two vertical / horizontal convergences in Q1 2013, flat with Q4 2011. The level of vertical / horizontal convergences has remained active in recent quarters as companies outside of the “pure play” EMS industry have renewed their interest in EMS and expanded horizontally. There were two private equity transaction for the second quarter in a row, following an extended drought of private equity interest in the EMS industry. In addition, Q1 2013 also had one EMS divestiture, remaining flat with Q4 2012. Two transactions occurred within the U.S. and Canada in Q1 2013 (29% of total transactions), representing a decrease over the previous quarter. This also highlights a trend of decreased M&A activity in the U.S. and Canada since this same time last year. There were two deals in Europe, down from five in the previous quarter. Cross-border activity is down from last quarter, with two transactions between high cost countries, compared to one transaction between high cost countries and two between high and low cost countries. There was one deal in Asia this quarter, representing the first deal completed in Asia since Q1 2012. Transactions by size for the quarter fell entirely in the Small tier, totaling seven, down from eight in this tier during Q4 2012.