CHICAGO – Nine EMS transactions took place in the first quarter, one less than the 10 reported in the first quarter of 2023, Lincoln International recorded in its latest EMS Quarterly Review.

Of those transactions, four were EMS consolidations, accounting for 44% of total activity, while vertical/horizontal convergence accounted for five of the transactions, or approximately 56% of the total activity, representing the highest number of vertical/horizontal transactions in the previous three years.

By geography, Europe had four transactions, Asia had three transactions, cross-border (high/high) had zero transactions, cross-border (high/low) had two transactions. US/Canada did not record a closed transaction in the quarter.

In terms of transaction by acquirer, small-tier EMS providers accounted for two of the transactions, while five transactions were categorized as mid-tier EMS deals and two transactions were categorized as large-tier EMS deals.

Mergers and acquisitions activity is expected to rise in 2024-2025, the report found, especially with middle-market EMS companies, driven by demand resiliency and broader market improvement. With the EMS sector set to expand significantly, more M&A activity is expected for consolidating key capabilities and introducing additional capital to realize near- and long-term growth.