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Merger acquisition divestment services_NVR-AMI


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M&A divestment services in electronics manufacturing services …

M&A divestment services in electronics manufacturing services
New Venture Research & Alerta Marketing Intelligence

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  • 1. Merger, Acquisition & Divestment Services Specialists in the EMS and Electronics Manufacturing Industries NEW VENTURE RESEARCH ALERTA MARKETING INTELLIGENCE
  • 2. Who is New Venture Research? Specialists in contract manufacturing and outsourcing management consulting services for more than 16 years – USA based Creator of syndicated research on the EMS industry through Electronic Trend Publications, the most widely quoted source in the industry -The Worldwide Contract Electronic Manufacturing Services Market -The Worldwide Electronics Assembly Market -The Worldwide Original Design Manufacturing Market -The Worldwide Printed Electronics Market -The Worldwide Solar Panel Assembly Market -Electronics Manufacturing in China -Nanotechnology Markets and Trends Page 2
  • 3. Who is Alerta Marketing Intelligence? A strategic marketing, business development and competitive intelligence firm – based in Eindhoven, the Netherlands Consulting based organization that has it roots in Assembleon and Philips Electronics SMT & SPE industry expert and creator of multi-client segmentation studies of the European market for electronics manufacturing Counselor to OEMs concerning LDI equipment markets and disruptive technologies like inkjet printing of electronics Adviser to governments and financiers in the formation of consortia between high tech cos. and innovation projects in the Netherlands Page 3
  • 4. What makes NVR and AMI the best partner for M&A services? • • • • • Experts in the EMS and electronics manufacturing industries, with a deep pool of contacts not available to banks and brokers Full strategic advisory services in the Americas (NVR), Europe (AMI) and Asia (E.J. Mackay, Shanghai, China) Many years of experience in many buy/sell transactions and strong skills in valuation and purchase/sale prices Total commitment, strong focus and exceptional service to develop business models that are future-proof Trusted resource with a time-earned reputation offering multiple references and examples of engagements Page 4
  • 5. What can you expect from NVR & AMI? • A well-developed and time-test research methodology that includes: – Description of the project scope, objectives, processes, expectations, time frame and cost – Development of prospectus/offering memorandum presenting the buyer or seller value-proposition in a professional and knowledgeable manner – A methodical search and screening of suitable companies by region, size and capabilities – Regular updates in progress, profiles of leading candidates, verification and validation of capabilities often performed anonymously in the first stage – Access and introduction to top executives, profiling of risks vs. opportunities prior to initial discussions – Assistance in valuation and comparison of targets, initial offering and negotiation of purchase/sale terms – Due diligence assist in closing and related support services to make the new business model work Page 5
  • 6. Recent EMS Acquisition Search • Problem: An Asian-based EMS company was interested in acquiring a smaller USA-based firm that would give it expanded capabilities and new customers. A profile criterion was developed and NVR / AMI identified over 100 candidates based on 3 tiers of desirability (1, California; 2, Texas, Oregon, Arizona, Washington; 3, Colorado, Montana, Idaho, New Mexico) that netted down to 12 suitable candidates. • Solution: The project is still ongoing, but because of the recent downturn, the client is postponing its review until 3Q09. The search resulted in identifying 6 extremely attractive EMS companies that would be accretive and provide exceptional capabilities and customers for the client. Candidates were extremely receptive to the client’s value proposition and purchase overtures. Page 6
  • 7. Recent EMS Company Purchase • Problem: A US equity investment firm was interested in identifying successful EMS providers with a consistent history of profit and a defensible market segment. The firm wanted to put together a syndicate that could dominate a low-medium volume and high mix assembly niche within the industrial, medical and transportation segments. To accelerate time to market, the company retained NVR / AMI to provide intelligence, guidance and introductions to the most eligible companies that would make the best acquisition candidates. • Solution: NVR / AMI provided an analysis of the EMS industry and profiled leading suppliers, profitability by segment, geography and application. CEO-level introductions were made to a wide variety of eligible companies. We assisted in the market valuation of selected firms, assessing their future potential in the marketplace and making recommendations for the best companies to be successful. Page 7
  • 8. Selection of Low-Cost Manufacturing Partner • Problem: A European-based OEM was interested in identifying a low-cost manufacturing partner in Asia, Eastern Europe and Mexico. To remain competitive, the supplier needed the manufacturing capabilities of EMS / ODM partners and suppliers in each region in the end use appliance markets. The objective of the project was to identify the best potential manufacturer in each geographic region for eligible partnership. • Solution: NVR / AMI surveyed the EMS industry on a geographic basis, profiling the leading suppliers by region. As our client had detailed performance and capability requirements by product, a matrix analysis was provided for each region. We recommended and introduced the top candidates and assisted the client in developing a selection criterion for the best partner, based on its internal needs, capabilities and outsourcing requirements. Page 8
  • 9. Selection of Low-Cost Manufacturing Partner • Problem: A US-based contract manufacturer was interested in identifying and partnering with a low-cost EMS supplier in China. The company was unfamiliar with suppliers in Asia, their business ethics, capabilities, and ways to identify, qualify and negotiate with the best potential partner. To expedite their decision-making process, the company retained NVR / AMI to provide intelligence, profile the most qualified candidates and assist them in the selection process. • Solution: NVR / AMI surveyed the entire EMS industry in China, profiling the leading suppliers by region. We detailed each company’s operations to guide our client in finding the best manufacturing match with internal capabilities and requirements. Through an iterative process, we provided a short list of the best candidates that matched the client’s production and philosophical needs, so that a more in-depth relationship could begin. Page 9
  • 10. EMS Company Wants to Be Acquired • Problem: A contract manufacturer was interested in being acquired by a larger entity. The sellers were facing problems of cash flow, capital investment and management’s ability to take the firm to the next level, but were in a very desirable region and had excellent customers. Because of the client’s niche in the high mix / low medium volume manufacturing sector, NVR / AMI were retained to help identity, quantify, and negotiation the best deal and terms. • Solution: NVR / AMI leveraged their extensive reach in the EMS industry, identifying and introducing the leading acquirers of emerging firms in the client’s vertical niche. We provided a long and short list of potential acquirers, exposing strengths and weaknesses, to guide the client as to the best parent candidates. We assisted management in negotiating the best terms by providing industry comparables and historical buying behavior of similar companies. Page 10
  • 11. EMS Company Wants to Be Acquired • Problem: A contract manufacturer wanted to sell to a larger firm and was exploring ways to identify a suitable buyer that would appreciate its strengths, customers, assets. Company operated in a niche in the high-mix, low-volume PCB assembly business, strongly focused on the DRAM business. Its customer base was growing rapidly but the company had not yet realized the growth rates that it would have to accomplish over the next two years. • Solution: NVR / AMI developed a search process, profiling and screening potential acquirers, and made initial inquiries and intros on the seller’s behalf. We successfully positioned the client before qualifying candidates and assisted negotiations to valuate the core business and strategic assets of the seller. A bidding situation resulted in multiple buyers which allowed the seller to realize the best price and resulted in a successful merger for both parties. Page 11
  • 12. Potential OEM Purchase Liability • Problem: A large medical products manufacturer expressed its intent to acquire another medical firm whose product would complement its current portfolio. While the candidate firm produced a highly profitable and popular product, it also held the potential for long-term legal exposure through customer liability. The sponsoring company's board wanted to be prudent and conduct an independent due diligence research effort as part of its oversight responsibility. • Solution: NVR / AMI revealed that the potential product liabilities were in fact short-term and highly risky, exposing the company to significant damages. Field interviews with physicians confirmed as much, and exposed a growing body of plaintiffs and liability lawsuits that would have a negative impact on the company. As a result, the sponsoring firm terminated the acquisition process, saving it (in hindsight), many millions of dollars in potential class-action lawsuits. Page 12
  • 13. Biographies of Principals • Randall Sherman is the founder of New Venture Research and has 25 years of experience in the development and marketing of high technology products. He specializes in consulting with many OEM and emerging firms in their product and business development strategies. • Mr. Sherman holds a Masters of Science in Electrical Engineering from the University of Colorado and an MBA from the Edinburgh School of Business, Scotland. He has previously been a Network Design Traffic Engineer for Honeywell, and was a founding partner of Lexicom Microsystems, a company offering networked electronic mail products. • Mr. Sherman subsequently became President and CEO of Lucid Information Services, providing legal, technical and market research services to a wide variety of technology firms. He then founded his own independent consulting practice, New Venture Research, to focus on new product market research, business development projects and M&A consulting services. Page 13
  • 14. Biographies of Principals • Frank Klomp is the founder of Alerta Marketing Intelligence, located in Eindhoven, the Netherlands. He specializes in creating Marketing Intelligence, enabling Marketing Strategies and delivering Business Development, catering to the needs of high technology ventures. • Mr. Klomp holds a Master's degree in International Economic Relations from the University of Amsterdam and a Bachelor's degree from Staffordshire University. He has 20 years of experience on the client side, generating value propositions and advising decision makers in manufacturing, banking and the public sector. • Mr. Klomp previously held senior Marketing positions at Philips Electronics, working with research consultancies and investment banks in the area of contract manufacturing, surface mount and semiconductor assembly. He is strongly focused on informing Strategic Alliances, building new Business Models and developing Emerging Markets. Page 14
  • 15. M&A Clients • • • • • • • • Able Electronics, San Jose, CA Aeroquip, Maumee, OH Alcatel, Paris Celetronix, Tel Aviv, Israel Chesapeake Holdings, Chicago eCycle, San Jose, CA Everglide, San Francisco, CA Genesis Mfg., Tampa, FL • • • • • • • • • Page 15 Ion, Emeryville, CA Jabil Circuit, St. Petersburg, FL Medtronics NexLogic, San Jose, CA Orion Mfg., San Jose, CA OSE, Taipei, Taiwan Sunstrand Corp., Rockford, IL Team Precision, Thailand Varian Mfg.
  • 16. Other Clients Agilent Technologies Akoya Capital Alcatel-Lucent Banta Corp. Birch Hill Equity Partners BP Solar Celestica Creation Technologies CTS Diehl Controls Elcoteq EPIC Technologies ESCATEC Fairchild Semiconductor Flextronics Fujitsu Computer Products Genesis Electronics Mfg. Guidant Hewlett-Packard IEC Electronics Indium InFocus Intel Ion Jabil Circuits KeyTronics EMS McKinsey & Co. Microsoft Morey Corp. Motorola MTS Systems Oki Semiconductor Orbotech Orion Manufacturing Page 16 Parthenon Group Philips Plexus Primus Technology Sanmina-SCI Siemens Silver Lake Partners Solectron Sun Microsystems Suntron Sypris Electronics TA Associates Varian Venture Manufacturing Westernelectronics Yorkton Securities
  • 17. Other Consulting Services • • • • • • • • • • • PEST and SWOT matrix Gap analysis Competitive forces survey Competitor benchmarking Market segmentation NPD / NPI market forecasting Value chain analysis Buyer decision analysis Product value mapping Customer value mapping Business balanced scorecard • • • • • • • • • • • Page 17 Growth strategy Customer targeting Marketing mix Chanel configuration Sales planning Value propositions Brand positioning Key account selection Portfolio management Entry / exit scenarios New business modeling
  • 18. Epilogue “It's not the big that eat the small, it's the fast that beat the slow” Jennings & Houghton Page 18
  • 19. Contact Us NEW VENTURE RESEARCH CORP. Nevada City, California +1-530-265-2004 ALERTA MARKETING INTELLIGENCE Eindhoven, Netherlands +31-6 4100 9362 Page 19