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Strong EMS Activity in 2010
February 21, 2011 |Estimated reading time: 1 minute
There were 46 completed EMS transactions in 2010, nearly doubling the 24 recorded in 2009. Similar to previous years, vertical/horizontal convergences were the most common type of transaction with 15 transactions in 2010, or 33% of total activity, compared to 12 transactions in 2009 which represented 50% of activity last year.
In 2010, there were 13 EMS consolidation transactions, up significantly from the six recorded in 2009, but still less than 2008 and 2007. The 13 transactions in 2010 represented 28% of the total, compared to six transactions representing 25% of the total last year. Private equity investments increased to eight total transaction in 2010, or 17% of the total. For 2009, private equity investments totaled two transactions, or 8% of the total. Lincoln expects that this increase was due in part to the improving market conditions and financing availability during the year.
EMS divestiture transactions were also up with seven transactions in 2010 compared to three transactions in 2009, representing approximately 15% and 13% of total transactions in 2010 and 2009, respectively.
OEM divestitures accounted for three transaction in 2010 compared to one in 2009. As a percentage of total transactions, OEM divestitures went from 4% in 2009 to 7% in 2010.
As illustrated in Chart C below, 10 of the deals completed in 2010 were cross-border. Within this category, seven transactions were between low-cost regions and high-cost regions and three were between two different high-cost regions. For this same period, 16 transactions occurred within the U.S. and Canada (35% of the total), 13 occurred within Europe (28%) and seven occurred within Asia (15%). Transactions for all of 2010 were led by the Small Tier, totaling 38, or approximately 83% of transaction activity. Large Tier EMS providers closed seven transactions, representing approximately 15% of the total. Mid Tier providers added just one transaction, representing approximately 2% of the total.
About Lincoln International
Lincoln International specializes in merger and acquisition advisory services, private capital raising and restructuring advice on mid-market transactions. Lincoln International also provides fairness opinions, valuations and pension advisory services on a wide range of transaction sizes.
With 10 offices in Asia, Europe and North America, and strategic partnerships with leading institutions in China and India, Lincoln International has strong local knowledge and contacts in the key global economies. The organization provides clients with senior-level attention, indepth industry expertise and integrated resources. By being focused and independent, Lincoln International serves its clients without conflicts of interest. More information about Lincoln International can be obtained at http://www.lincolninternational.com/.