Included in the July 2021 issue of MMI:
First‐Half M&A Down by 29.4%
The number of M&A deals done in the EMS industry decreased in the first half of 2021 versus the year-earlier period. According to MMI’s count, 12 M&A transactions closed in the EMS industry during the first six months of the year, down from 17 in the first half of 2020 (Chart 1). That’s a decrease of 29.4%. If deal making continues at this pace in the second half, then 2021 will go down as the dullest year for industry M&A since 1995.
While M&A has been consistently in the 12–18 deal range since 2010, current activity has been fueled by corporations’ quest for growth and new customer acquisition. Rather than trying to achieve all the growth organically, it’s easier to buy another company’s existing customers, profits, and market share, often resulting in accretive earnings. Moreover, the availability of debt financing at historically low financing rates is also a boon for M&A activity, especially in the healthcare and tech sectors. In the tech sector, it is large organizations that are using their significant cash assets to continue buying up the manufacturing and intellectual property of their smaller competitors.
Other articles in MMI
- Some Quarterly Results
- Company News
- TE Connectivity to Acquire ERNI Group