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EMS Transactions Down in 2015
February 3, 2016 | Lincoln InternationalEstimated reading time: 1 minute
There were 27 EMS transactions recorded in 2015, down from 33 recorded in 2014. EMS Consolidations were the most common type of transaction with 12 transactions in 2015, or 44% of total activity, compared to 17 transactions in 2014 which represented 52% of activity last year.
In 2015, there were 11 Vertical/Horizontal Convergences, up from the ten recorded in 2014. This year’s activity represented 41% of the total, compared to 30% last year. Private equity investments decreased in 2015, with two total transactions, or 7% of the total, as compared to six transactions in 2014 or 18% of last year’s total activity. There was one EMS divestiture, representing 4% of total activity, and zero OEM divestitures in 2015. Both categories recorded zero transactions in 2014.
There was one transaction categorized as diversification into EMS in 2015, representing approximately 4% of total activity, compared to zero transactions in 2014.
In terms of geography, 12 of the transactions completed in 2015 occurred in North America. This represented 44% of total transaction activity in 2015. The next largest geography in terms of transaction volume was Europe, with 11 transactions in 2015, representing 41% of total activity. Two transactions occurred between different high-cost countries (7% of the total). The final two transactions were split amongst other geographies with one occurring in Asia (4%) and one between a high-cost region and a low-cost region (4%). No transactions occurred in South America.
In terms of transaction size, Small Tier EMS providers accounted for a majority of the 2015 transaction volume with 14 acquisitions, or approximately 52% of total activity. Large Tier EMS providers accounted for seven acquisitions, representing approximately 26% of total activity. This level of activity from the Large Tier represents a significant increase compared to recent periods as this group recorded zero transactions in 2014. Six acquisitions by Mid-Tier EMS providers occurred during the year, representing approximately 22% of the total.
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