CHICAGO – Six EMS transactions were recorded in the third quarter, representing a decrease from the nine transactions recorded in the third quarter of 2022 and the eight recorded in 2021's third quarter, according to the latest EMS Quarterly Review by Lincoln International.

Of the six transactions, five were EMS consolidations, which was an increase from the third quarters of 2022 and 2020 but a decrease from the third quarter of 2021. One private equity investment was recorded in the quarter, while diversification into EMS, EMS divestitures, original equipment manufacturer divestitures and vertical/horizontal convergence did not account for any transactions.

By geography, Europe had two transactions, the US/Canada had one transaction, and cross-border had three transactions. Asia did not record a closed transaction in the quarter.

In terms of transaction size, small tier EMS providers (less than $300 million in sales) accounted for three of the quarter's transaction volume, while the remaining three transactions were categorized as mid tier ($300 million to $3 billion sales) EMS deals.

Lincoln International predicts a rise in mergers and acquisitions in 2024-2025, especially with middle-market EMS companies, driven by continued nearshoring 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, the bank said.

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