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© blotty-dreamstime.com Electronics Production | August 07, 2013

EMS: M&A activity decreased again

There were six completed transactions in Q2 2013. The six transactions show a decrease in the M&A activity compared to the seven transactions in the previous quarter.
However, the level of transaction activity is expected to pick up during the remainder of 2013 as confidence in the global economy continues to improve.

EMS consolidations and vertical/horizontal convergences represented two transactions each, or 33% of total activity in Q2 2013, respectively. These are both flat in comparison to the prior quarter. There was one transaction classified as an OEM divestiture in Q2 2013, up from zero in the prior three quarters. There was one private equity investment in Q2 2013, down from two each of the prior two quarters. The continued high level of EMS consolidations and vertical/horizontal convergences suggests electronics companies remain focused on using available cash to build on their core competencies and expand their overall business portfolio.

Three transaction occurred within the U.S. / Canada in Q2 2013, or 50% of total transactions, representing a decrease from two transactions in the U.S. / Canada in the previous quarter. There were two European deals, level with those in Q1 2013. There was a crossborder transaction between high and high cost regions (China and U.S.), down from two in this classification during Q1 2012.

Transactions by size for the quarter were primarily within the Small tier, with four of the transactions, or 66%, falling into this tier. The other two transactions were split between the Large and Mid Tier. Flextronics’ acquisition of Motorola Mobility’s manufacturing operations, which closed in Q2 2013, represented the one Large tier transaction in Q2 2013. Benchmark’s acquisition of Suntron Corp. was the sole Mid tier transaction recorded in Q2 2013.

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