Data-Driven Value in EMS M&A
No matter the sector or situation, data is often the most important asset in a seller’s toolkit. Still, money is being left on the table and transactions are being put at risk because few sellers and sponsors fully understand the importance of their proprietary information. The electronics manufacturing services (EMS) landscape is particularly vulnerable to underutilizing data during an exit process.
It is a fundamental requirement for high-quality assets in the EMS sector to harness the power of their data to drive value and generate sophisticated buyer interest. When shareholders and sponsors seek an advisor to guide an asset’s sale, it is crucial to identify an advisor with a proven track record and capability to fully leverage your team’s information. Whether a company is early or advanced in its journey to unlock value from dormant data, the process can be overwhelming. The right sell-side partner absorbs this process burden and prepares powerful insights that amplify favorable market reception.
In the article below, Lincoln International’s experts highlight the core value drivers of EMS data, prior examples of our team’s proven expertise and a checklist for sponsors and management teams preparing for a sale.
Summary
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Lincoln International’s experts present how a data-driven approach can drive value and grow market potential in the EMS sector.
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What Data Matters—And Why
Electronics are everywhere. Whether you are an outsourced manufacturing company or electronic components producer, understanding the end product’s application-level detail and go-forward market potential is paramount. EMS is ultimately a service business, and simply breaking down product revenue by end market fails to maximize results. Companies that take the proactive steps necessary to leverage their underutilized data resources in thoughtful ways create a more substantiated forecast narrative and, consequently, a more informed buyer universe.
After evaluating, curating and positioning a compelling data-driven story, benchmarking is the next crucial step for an advisor to take. A sell-side advisor should leverage prior transaction experience to more accurately benchmark assets based on granular end market data. With a deep enough well of proprietary knowledge, the right partner will build the narrative of an asset well before the sale.
Lincoln’s Lessons from our Proven Track Record
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Pre-Sale Checklist
Sponsors and management teams should undergo the following steps in order to maximize upside and position the company with a data-driven approach:
- When preparing for a sale, sponsors and management teams should set up systems to track application-level details.
- The sell-side advisor, when brought in, should substantiate the internally tracked details with additional third-party data.
- Once the appropriate level of detail has been reached and analyzed, the forecast is further underwritten, and buyers are more willing to underwrite a higher multiple or validate future (higher) earnings.
ConclusionLincoln International’s EMS experts leverage strong relationships with industry leaders and a deep expertise to serve the unique needs of clients in the highly integrated sector. Our team’s connections, along with our track record of exceptional results, give us the edge to provide clients with creative and innovative financial solutions. Reach out today to learn how Lincoln harnesses and leverages data for its clients. |
