Growing through M&A in a competitive and fractured market
Inission is a Swedish electronic manufacturing and services (EMS) company with facilities in the Nordics, Estonia, and more recently Italy and Tunisia. The Nordic EMS market has been growing at an annual rate of 4% and is serviced by a few large players that have more than half the total market share, and many smaller companies. The market is highly competitive with companies competing mostly on cost. Since 2011, Inission has grown sales by 19% annually, of which we estimate 2.4% to have been organic; this shows that the bulk of the growth has come from acquisitions, and the fractured market structure should encourage further consolidation. As Inission's R3Y adj. EPS has grown by 6% annually since 2013, even though margins have decreased, we deem the M&A activity to have been value accretive.
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