EMS industry Q2-07 DealReader summary - Lincoln International

August 22, 2007

There were fifteen completed transactions in Q2 2007 compared to fourteen in the previous quarter. EMS consolidations represented seven transactions, or 47% of total activity in the second quarter of 2007, as compared to six transactions, or 43% of total activity in Q1 2006.

OEM divestitures decreased in number from one in Q1 2007 to zero in Q2 2007. Vertical / horizontal convergences increased from four transactions in Q1 2007 to five in Q2 2007, representing an increase in percentage of total transactions from 29% to 33%.

There was one EMS divestiture closed in Q2 2007, the same as the number in Q1 2007. There were also two private equity investments in Q2 2007, the same number as in Q1 2007.

As is illustrated in Chart C below, three, or 20%, of the deals in Q2 2007 were cross-border. Within this category, one transaction was between high-cost regions compared to three in Q1 2007. Two transactions in Q2 2007 were completed between high-cost and low-cost regions, compared to zero in Q1 2007.

For Q2 2007, seven transactions occurred within the U.S. / Canada region compared to five transactions in Q1 2007. Four of the closed transactions in Q2 2007 occurred within Europe and one was reported from within Asia, compared to five and one, respectively, in Q1 2007.

Note: "High / High" indicates cross-border transactions between Japan, Taiwan, Western Europe and U.S. / Canada; "High / Low" indicates cross-border transactions between high-cost regions and low-cost regions.