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84 I-CONNECT007 I REAL TIME WITH... IPC APEX EXPO 2024 SHOW & TELL MAGAZINE T his year's IPC APEX EXPO was like the story of "Goldilocks" for me: not too crowded and not too slow. If it's too crowded, no one has the time to talk because they're too busy with the custom- ers. If it's too slow, all the owners and others interested in M&A go home early. If it's not so busy, there are more places to sit and the lines are shorter, which can feel just right. I stayed very busy with various discussions on M&A: about 75% with buyers and 25% with sellers. Overseas buyers were especially inter- ested in talking to me about making acquisi- tions in the U.S. Many are concerned about potential tariffs or other backlash due to poli- tics. Also, the U.S. market is perceived to have growth potential due to government incen- tives and policies. Many overseas companies want to get a foothold in the U.S. so they can take advantage of this potential growth. Because it was difficult during the pandemic for overseas companies to do deals, there is a significant level of pent-up demand. Sellers are currently sitting on the sidelines due to a variety of factors. Revenue growth was stalled in 2023, and while business may now be picking up, growth is not robust enough or broad enough to give sellers enough confidence to go to market. Buyers, especially those that are backed by private equity, have a lot of cash, and that is keep- ing valuations at a good level. Although they may not be ready to jump into the market, a fair number of owners are getting prepared, which is really key to having a successful exit. Almost all the owners I met said that they are buying equipment or at least seriously think- ing about it. I am sure that makes the equip- ment companies happy. Plus, it is good to see companies continuing to invest. I believe that the number of shops in the North Ameri- can PCB and EMS sectors will continue to go down, mostly due to demographics. However, the companies that remain open will be larger and stronger as long as they keep investing. We are currently representing a PCB shop for sale, and the attention has been good. We also have another deal under LOI for a buyer and several projects that are under discus- sion. Aside from my firm's deals, we are aware of several deals in various stages of the pro- cess. Interest rates are higher than in previ- ous years, but it seems like buyers and lenders have adjusted to these new levels. Based on the mood at the show, I think 2024 should be a good year for M&A in the PCB and EMS sec- tors. S&T Tom Kastner is the president of GP Ventures, and an I-Connect007 columnist. To read his column, click here. IPC APEX EXPO Was 'Just Right' by Tom Kastner Show Review