Private equity firms look for money from high net worth individuals and wealthy investor groups and use the funds to take over; change, and resell companies.
Private equity firms usually invest in growth businesses or organizations that serve a specific niche in a particular industry. EMS isn’t typically categorized as a growth industry.
Meanwhile, more EMS providers are finding it difficult to strengthen their position in the marketplace. Many have not been able to find sure footing for some time. Some providers turn to acquisitions with hopes to acquire new customers with other providers serving similar or new markets. But for many reasons most M&As in all industries don’t work.
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Managing cash conversion in EMS manufacturing programs
Recent trends in contract electronics M&A
EMS mergers, acquisitions, joint ventures, partnerships
The chart below illustrates the chances for M&A success based on whether or not the buyer is acquiring a company with a technology that matches his own, or has technology that is an extension of his own or, has a completely new technology. The same can be said for market. For example, an EMS provider serving non-traditional electronics services end markets may not do as well should he acquire a provider serving the consumer devices market.
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