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96 I-CONNECT007 I REAL TIME WITH... IPC APEX EXPO 2023 SHOW & TELL MAGAZINE T his may have been my favorite IPC APEX EXPO of all time. I've been com- ing since 1999, but I missed the last two years due to COVID and a busy schedule. It was great seeing some old, familiar faces and meeting some new ones, too. Although M&A deals in the North American PCB and EMS sectors were down in 2022 com- pared to the past few years, there was a lot of "deal energy" at this year's show. One reason for that is the number of announced deals that are scheduled to close in early 2023: two PCB deals for Firan Technology Group and the pending APCT/Advanced Circuits deal. As of today, three EMS deals were announced in January: Artaflex's acquisition of Custom Rapid Solutions, both located in Canada; the Gladi- ator Group's acquisition of BEST, Inc., located near Chicago, Illinois; and Niche Electronics' acquisition of L-Tronics in Massachusetts. Another reason for all the enthusiasm is that the industry's top companies are committed to growth and investment. Just about everyone I met was interested in acquisitions in 2023, not just in the PCB and EMS sectors, but also in equipment, materials, wire/cable, software, design services, and related industries. Most buyers are interested in acquiring profitable, growing companies. A few are also interested in distressed deals, but frankly, we have only seen a few of those lately. Even with all this positive energy, sellers may be a bit hesitant due to the gathering eco- nomic storm clouds. But as long as backlog is strong and there are no major issues with the business, there are buyers out there. Some of the shine may have come off valuations in the second half of 2022, but the market still seems strong compared to pre-COVID levels. Owners dealt with material price increases, parts and labor shortages, and other headwinds in 2022. Those issues may have calmed down some- what, but now backlogs may be softening. U.S. buyers seem to be the most active. There is also plenty of interest from European buyers, although they must deal with a strong dollar, high energy prices, and a generally weak European economy. Asian buyers have been on the sidelines for several years, so it might be time for them to become more active. Public companies have also been quiet for a while, so there could be a lot of pent-up demand. All buyers have been hit by higher interest rates, but on the other hand, cash on hand or "dry powder" is at a high level. According to Mur- phy's Law of Business, "If it ain't one thing, it's something else." In other words, timing is always tricky. We've been busy with deals, and if the energy I found at IPC APEX EXPO is any indicator, 2023 should be a busy year for M&A in the PCB and EMS sectors. S&T Tom Kastner is a regular columnist for I-Connect007. To read past columns, click here. Feeling the 'Deal Energy' by Tom Kastner • GP VENTURES show review

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