CHICAGO – Merger and acquisition activity in the EMS sector slowed slightly in 2008, with a total of 48 EMS companies changing hands in 2008, down three from 2007.

Consolidations were the most common transaction, with 19 taking place last year, flat with 2007, says Lincoln International, a private equity group that tracks the industry.

“Vertical or horizontal convergence” accounted for 17 deals, up seven from a year ago. There were also four OEM divestitures and five EMS divestitures in 2008.

Private equity investments slowed, accounting for three transactions, down from seven the year before.

Regionally, 20 transactions took place in North America and Europe, respectively, and four in Asia (8%).

By volume, companies of $150 million or less in revenues were more likely to be dealt: 34 of the smaller tier EMS firms were involved in transactions in 2008, Lincoln said. The largest deal involved a Foxconn subsidiary’s purchase of the PC assets of Sanmina-SCI. The most active buyer was CTS Corp., which acquired three separate companies during the calendar year.

June and September were the busiest months, with seven transactions apiece.