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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.

TAMPA, FL -- SMT placement system OEM Europlacer has relocated to a new, larger facility here.

TEMPE, AZ – US manufacturing grew in April for the ninth consecutive month, with the PMI up 0.8 percentage points to 60.4%, says the Institute for Supply Management. The rate of growth was the fastest since June 2004, when the index hit 60.5%.

A reading above 50% indicates the manufacturing economy is generally expanding.

New orders jumped 4.2 points to 65.7%, and production was up 5.8 points to 66.9%. Inventories were down 5.9 percentage points to 49.4%, while customer inventories dipped 6 points to 33%. Backlogs were down a slight 0.5 points to 57.5%. Employment registered its fifth consecutive month of growth.

“The manufacturing sector grew for the ninth consecutive month during April,” said ISM spokesperson Norbert J. Ore. “Manufacturers continue to see extraordinary strength in new orders, as the New Orders Index has averaged 61.6% for the past 10 months. Overall, the recovery in manufacturing continues quite strong, and the signs are positive for continued growth.”

The overall economy grew for the 12th consecutive month.

RICHARDSON, TX – EMS provider Trilogy Circuits has completed its facility expansion, doubling its size to 20,000 sq. ft.

“With the expansion of our facility, we look forward to continued growth in all areas of our markets, including government and the aerospace industries, as well as expanding on our existing capabilities, which include functional tests, box build and chassis units, printed circuit assembly and cabling assembly,” said Charles Capers, CEO of Trilogy Circuits.

Trilogy Circuits has hired several production engineers and assembly technicians since beginning the expansion of its headquarters in 2009, and plans to increase its workforce in the Dallas-Fort Worth area by an additional 20% over the next year.