In last month's IP&E Market Insider newsletter, I noted that it was very likely that we would see more interconnect, passive, and electromechanical (IP&E) component manufacturers focused on high-performance product development to offset dwindling margins in their commodity businesses as well as more targeted acquisitions of niche companies that give them entry into higher end products or specific markets such as military/aerospace. Here it is one month later and there have been several more targeted acquisitions announced by IP&E component manufacturers and distributors.
I agree with my colleague and EPS managing editor Barbara Jorgensen who noted in a recent newsletter that the electronics industry is not likely to see the merger and acquisition frenzy we saw in the 1990s, but there has been a spike in acquisitions that are much more strategic. Vishay Intertechnology is a perfect example. The electronic components giant recently purchased Holy Stone Polytech for $21 million to bolster its capacitor portfolio with Holy Stone’s polymer tantalum capacitor technology. The handful of acquisitions made by Vishay over the past two years were all specialized component manufacturers, including MCB, Huntington Electric and HiRel Systems. The latest acquisition is part of Vishay’s expansion strategy of acquiring strategic, niche passive component manufacturers that add to its high performance portfolio and expand its market share in existing product technologies.
Even distributors are expanding through niche acquisitions. TTI recently announced the acquisition of Astrex Electronics, a specialist distributor in the military/aerospace connector market, while Sager announced the purchase of PowerGate, a power specialist distributor.
TE Connectivity also made a significant acquisition as part of its plans to boost sales via targeted acquisitions and expansion into fast-growing segments. The electronic components company recently agreed to purchase Measurement Specialties, a sensor specialist for $1.7 billion. In April, TE Connectivity agreed to buy specialist connector maker Seacon Group for $490 million, expanding its offerings in the military marine and general marine industry.
In addition to acquisitions to grow sales and boost profits, IP&E companies are making efforts to expand their portfolios into new product areas. One of those connector specialists is ERNI Electronics, which has expanded its product portfolio beyond telecom interconnects that once dominated its portfolio.
In case you haven’t heard the news, Electronics Purchasing Strategies launched this month a new dedicated site catering to manufacturers, distributors and buyers of interconnect, passive and electromechanical components. The IP&E Marketplace provides news, research and data about what’s happening in the IP&E market as well as showcases new products, technical information, videos, webinars and other services from suppliers and distributors. The marketplace is designed for buyers and sellers of IP&E components to collaborate and link up directly with each other.
This is an excerpt from the June IP&E Market Insider newsletter.