The Clouds Are Breaking up over EMS in Europe to Reveal Dramatic Changes

By Dieter G. Weiss, in4ma

Earlier this year we noted that the European EMS industry is going through dramatic changes.  Now the clouds are finally lifting to reveal what is happening and why.

For the last three years, EMS from Scandinavia and France have continuously transferred orders to their factories in Eastern Europe to reduce cost. Companies of about 50 Mil. Euro in revenues have realized the necessity to change their service offerings. They foresee the market demand to offer embedded systems, design services, box build, logistics and after sales services. For companies in the before mentioned revenue range this is an almost impossible task. People began to look for investment capital and several companies found Equity/Capital Partners last year. The latest was Lacon Electronic GmbH in Karlsfeld, Germany, which sold 70% of shares to Hannover Finanz Group in order to secure future investments.

This alone is not sufficient for the European EMS industry to prepare for the future. Larger company structures are necessary in order to convince global OEMs to transfer some of their production to these EMS companies.

GPV International of Denmark started the race at the end of 2018 by acquiring the Swiss based CCS Group. This lifted GPV into the group of TOP 15 European EMS companies. Four weeks later Katek SE, in Munich, Germany bought ETL Elektrotechnik Lauter GmbH in Mauerstetten, Germany and lifted themselves as well into the TOP 15 group.

In April 2019, Elektronikgruppe München, a strategic investment group, already having a portfolio of five medium sized EMS companies between 10 to 20 Mil. Euro, bought the majority shares of PressFinish Electronics GmbH in Germering, Germany lifting themselves into the TOP 15 EMS in Germany.

In May, Scanfil Oy in Sievi, Finland, acquired Hasec-Elektronik GmbH, in Wutha-Farnroda, Germany in order to finally secure a successful footprint in the biggest European EMS market.

In July Hanza Holding AB puchased Ritter Elektronik GmbH in Remscheid, Germany and its Czech subsidiary. Hanza, in the past had focused more on mechanical manufacturing services; now it is switching strategy as the electronics business appears more promising.

In August, Katek SE bought Bebro electronic GmbH in Frickenhausen, Germany and their Czech subsidiary Befra Electronic s.r.o in Horní Suchá and the three factories of Beflex Electronic GmbH in Frickenhausen, Munich and Witten, Germany. This move finally made Katek SE the number two EMS company in Germany, and if all large European EMS will have a similar organic growth in 2019, bring Katek SE to the number eight spot of the European EMS industry, overtaking All Circuit, Lacroix and Eolane.

The race is still on, with European EMS companies making sure they are attractive to global OEM companies. To be sure, they have several advantages in the global competitive arena: they are innovative, reliable and fast.

Here is a summary of M&A activity in Europe over the past 12 months:

• August 2019  Katek SE, Munich/D buys all shares of Bebro Electronic GmbH Frickenhausen, Germany, Befra Electronic s.r.o. Horní Suchá/Czecj Republic, and Beflex Electronic GmbH, Frickenhausen, Witten and Munich, Germany.
• July 2019 Hanza Holding AB, takes over Ritter Elektronik GmbH, Remscheid, Germany and their Czech subsidiary.
• May 2019, Scanfil Plc. in Sievi, Finland buys all shares of Hasec Elektronik GmbH in Wutha-Farnroda.
• May 2019 Hannover Finanz Group/Hannover & Wien buys 70% of shares of Lacon Electronic GmbH, Karlsfeld, Germany from the three Shareholders.
• April 2019 Elektronik Gruppe Munich, Germany buys the majority shares of Pressfinish GmbH which now becomes the sixth medium sized EMS company for the Group.
• February 2019 BB electronics A/S, Horsens/DK bought Wendell electronics a.s. in Lanškroun, Czech Republic.
• January 2019 Katek SE, Munich, Germany buys all shares of ETL Elektrotechnik Lauter GmbH in Mauerstetten, Germany and integrates them together with the Katek GmbH and Steca GmbH companies in Germany, Hungary and Bulgaria.
• January 2019 Melecs Group, Vienna, Austria bought 70 % of shares of Prettl Electronics Querétaro in Querétaro, Mexico.
• December 2018 GPV International A/S, Tarm/DK bought the Swiss CCS AG, Lachen, Switzerland with its sisters CCS Gohlke GmbH, Hildesheim, Germany, CCS AdaxysMendrisio, Switzerland, CCS Akatech Kabel GmbH, Feistritz an der Gail, Austria, CCS Lanka PVT Ldt, Negambo, Sri Lanka, CCS Slovensko s.r.o. in Hlohovec-Sulekovo, Slovakia.
• December 2018 Fidelitas Industrieholding GmbH Göppingen, Germany buys Erni Electronic Solutions GmbH &Co. KG, Göppingen, Germany from the mother company ERNI Group Holding AG, Luzern, Switzerland, as they want to focus on their main business.
• December 2018 Efore Plc. in Espoo, Finland closed the purchase of Powernet International Oy in Vantaa, Finland.
• November 2018 Kitron ASA in Billingstad, Norway signed a deal with API Technologies Corp. in Marlborough, MA, USA to buy EMS business of API in Windber, USA.
• November 2018 Inission AB, Stockholm, Sweden bought the Norwegian Simpro Group AS with Simpro AS, Loekken, Norway and Noca AS, Trondheim, Norway.
• November 2018 Note AB, Lund, Sweden bought Speedboard Assembly Services Ltd, Windsor, UK.
• November 2018 SP-Group Indonesia, buys assets insolvent s.e.t. electronic GmbH, buys s.e.t. electronics Polska SP. z o.o. Lubsko, Poland.
• November 2018 Capvis Equity Partners AG Zürich, Switzerland, buys the majority of shares of Variosystems AG, Steinach, Switzerland, Variosystems Pvt Ltd in Badalgama, Sri Lanka, Variosystems Co. Ltd in Suzhou, China and Variosystems Inc. in Southlake, Texas, USA.
• October 2018 Deutsche Beteiligungs AG bought the majority of shares of Sero GmbH & Co. KG, Rohrbach, Germany and the remainder taken by the management in an MBO as the former owner wanted to retire.
• October 2018 Inission AB, Stockholm, Sweden bought the Swedish Speed Production AB, Boras, Sweden from Speed Group AB Boras in October 2018.
• August 2018 S&T group, Vienna, Austria signed a deal with exceet Group SE, Grevenmacher/L to purchase the „exceet electronics”-activities with factories in Grossbettlingen, Germany, Ebbs/A and Rotkreuz, Switzerland. All factories were renamed Kontron Electronics.
• August 2018 Universal Scientific Industrial (USI) (Taiwanese ASE Group) acquired 60% of shares of Polish EMS factory Chung Hong Electronics, Biskupice Podgórne (Wrocław), Poland. Remaining shares are to be bought in 2019