CHICAGO – The stabilizing economy is leading to more M&A activity in the EMS sector, a leading sector advisory firm says.

The electronics manufacturing services industry saw 11 deals completed in the first quarter, eight by firms smaller than $150 million in annual sales, Lincoln International said today.

In its quarterly newsletter Lincoln said, “Overall, the economic conditions appear to have stabilized, which has created an opportunity for companies to pursue strategic investments within the EMS sector.”

Seven of the deals were so-called vertical/horizontal convergences, a trend Lincoln says shows a
“willingness” for EMS companies to buy divisions outside their core assembly focus or non-EMS companies expanding into the assembly market.

There was one EMS consolidation and one divestiture, Lincoln said.

By region, three deals took place in Europe, three in North America and four in Asia. One counted as a cross-border transaction.

Separately, Lincoln noted cash conversion cycle times are increasing across all EMS sectors.