Tag Archives: DEK

2014: The Year of the Deal

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Today brings to an end one of the most fascinating years of acquisitions since the crazy Internet era of late 1990s and 2000.

Unlike that episode, however, 2014 was a much more orderly state of affairs, and while some of the deals were not foreseen, the pricing (and volume) were within the realm of reason.

To recap:

  • TTM Technologies announced it would buy Viasystems, bringing to a close one of the most talked-about chapters in PCB industry history. The deal has cleared all but the last few regulatory hurdles, and is expected to close in mid 2015.
  • Rogers will buy Arlon, merging two leading suppliers of high-frequency laminate materials, and perhaps further complicating the supply chain for some of the smaller fabricators that lack the purchasing power of the major players, not to mention consolidating the RF/microwave product supply base for the US Defense Department. Given its shoulder shrug of TTM’s Chinese ownership, will the DoD even bat an eye over this, or will it be concerned enough to throw a wrench in the deal?
  • On the assembly side, ASM purchased DEK, which had been readied for sale since late 2011. The acquisition gives ASM top-of-the-line print-to-placement equipment offerings and positions it to compete with the major Japanese players such as Panasonic, Yamaha, Juki and Fuji.
  • Nordson acquired Dima Group, stretching its traditional dispensing and, later, AOI and test focus into SMT placement. Will Nordson keep the pick-and-place lines, or package that unit up and sell it?
  • Likewise, Amtech Systems has a pending agreement to buy BTU, stretching its semiconductor and solar production focus to include SMT reflow.
  • And just yesterday Kulicke and Soffa made a deal to buy Assembleon for $98 million in cash. While Assembleon had been expected to be acquired since Philips first put it on the block several years ago, K&S’s entry into the printed circuit board equipment space was unforeseen. Does it plan to continue to roll up other companies (Speedline?) and build a worthy competitor to ASM?

Most of the major deals that took place in 2014 happened on the supplier side. Does that presage a similar consolidation on the manufacturing end in 2015? Will some of the units long-rumored to be in play (Multek, Hitachi) finally be consummated? Will EMS, which took a breather in 2014 after major deals involving Natel (Epic), Benchmark (Suntron, CTS) the year before, catch a new spark?

We can’t wait to find out. Happy New Year!

 

Dover’s Big Exit

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Is it the water?

Just days after Cookson announced it would split in two and spin out its Alpha Metals solder unit, Dover says it too will divest its electronics assembly and test businesses.

Just like that, we are primed to lose two of the longstanding electronics supply chain brand owners. The difference here is, Alpha’s management and ownership will remain, for now, the same, as the stock will be split among Cookson’s former shareholders.

The future of the Dover businesses, on the other hand, is much less clear. Dover hasn’t said whether it will sell the businesses piecemeal, as it did with Universal Instruments and Vitronics-Soltec in 2006. The brands on  the block — DEK, OK International and Everett Charles Technologies among them — probably brought in at least $1 billion in annual revenue prior to 2012’s dropoff, and have traditionally been higher margin performers as well. Not many equipment companies have pockets deep enough to absorb the price Dover will ask. Yet that’s what employees of those businesses must be hoping for right now, as the slash and burn methods of the private equity companies have been excruciating for everyone involved.

We don’t think this was a quick decision brought about by this year’s slump. Sources tell us Dover has been discussing the possible divestiture of these businesses for nearly a year. The guess here is that Dover’s management tired of the endless boom-bust cycles of the electronics industry. It’s hard for an equipment company to meet Dover’s goal of 10% revenue growth and 15% operating margins year in, year out.

We also believe Dover has a buyer on the hook, as some might recall that when Dover announced the impending divestiture of Universal, the deal went through a month later. Who that buyer is (ITW? Nordson?), and at what price, are now the questions.

 

Check out Board Talk, our new industry bulletin board: theprintedcircuitboard.com

GKG: Westward Ho?

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Southeast Asian assembly process equipment companies have approached Western markets in fits and starts.

A few have made inroads: From time to time, we have seen JT and Fulongwin soldering equipment at US plants, usually smaller ones (Flextronics is an exception) and often on the US West Coast. But while we’ve been reporting for more than a decade on the availability of literally scores of Chinese-made brands, some of which are very popular in Taiwan and China, it’s still highly unusual to see any make it across the ocean.

Many have been stymied by patent issues that effectively have blocked them specifically from the US and European markets. Another problem is finding good channel partners. From time to time, firms ranging from independent reps like FHP Reps and Bill West to solder paste vendors like Qualitek have tried, with limited success. Service and access to spare parts have been limiting factors.

That’s what makes Friday’s announcement from GKG so interesting. GKG has named Juki as exclusive distributor of its screen printers in the Americas. Known primarily for its placement equipment, Juki has been inching toward a full-line offering for the past couple years, having begun distributing Intertec’s selective soldering equipment in 2009.

For years, DEK and Speedline have dominated the Western printer markets, with Asys/Ekra in third with an estimated 10% share. Juki’s track record and never-say-die approach to selling makes it a formidable competitor. However, Juki has many of the same distributors as Speedline, and it is unclear that they will give up the latter for a new player.

But the real prize may be the emerging South America market. As Juki CEO Bob Black told us, “In Latin America, out major competitors are offering complete lines. To be competitive, we need to do the same.” And Juki has the breadth and depth in its service department that many standalone reps have not.

Keep an eye on this.

CyberOptics’ Coup

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It’s always a good deal when you can simultaneously supply an end-product to end-customers and critical components from said end-product to competitors.

And that’s the situation CyberOptics now finds itself in after inking a deal last quarter to put its sensors in erstwhile AOI competitor Viscom’s solder paste inspection products. (CyberOptics acknowledged a deal in February but did not disclose the company until today.)

It’s a great move for CyberOptics, which continues to impress under Kitty Iverson’s leadership. The company, which by most accounts trails privately held Viscom in terms of annual revenue in the uber-competitive electronics assembly AOI market, has rebounded steadily from the market slide of 2008-09 and the tragic death of founder Steve Case. Sales doubled in 2010 to $57 million, and by becoming a supplier to its AOI competitors, CyberOptics triangulates its customer approach. Given that CyberOptics also supplies sensors to DEK for printers and Juki for placement machines, the modest company is positioning itself to become a true bellwether of the electronics assembly market health.

Munich Madness Not So Crazy

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Attendance at the.four-day Productronica started slow today and built as the day went on. Still, the drop in traffic is noticeable. Americans and Asians are in very short supply.

Spoke with more than 25 exhibitors today. Most say September and October sales were improved and some capacity buying is occurring in Asia.

Some interesting developments seen thus far: a new modular placer from Juki, the KE-3020RL, now in beta and due out next summer or fall; DEK’s Sentinel post-solder inspection unit, which fits on any of its post 2005 printers and features 8 2MP cameras; and Asymtek’s Simultaneous Dual Jetting setup, which is aimed at high volume PCBs. (Asymtek had, as usual, several new machines, and also is pushing hard on its new corporate identity, in which parent company Nordson’s name is prominent. More on them later.)

Ran into old friend Keith Favre, the ex-Speedline and Electrovert sales wizard who was last seen running PhotoStencil. He has launched a rep business under the name FHP LLC and is handling Foulongwin and Mirae, among others. Also, his neighbor in Texas, Bob Stevens, the ex-Speedline Asia president, is alive and well.

Also seen: A women pushing a baby stroller — complete with sleeping baby — down the show floor. That’s a first.