My firm goes to a lot of trade shows—at least one each month—because it is a great way to meet business owners as well as their trusted advisors. Trade shows are also an excellent way to hear industry information that otherwise we would not hear (aka rumors). We met a lot of interesting people in the industry at this year’s SMTAI.
SMTAI is always a great show for us to attend because a wide variety of companies exhibit, such as PCB, PCBA, equipment, materials, distributors/brokers, and other companies. While our main focus is M&A advisory, we are often asked by our clients (or potential clients) if we know an expert in a certain field or for our opinion on an industry-related topic. Often, if we do not know the answer, we know somebody who knows the answer, and we usually met that person at a trade show. Many times, those experts are hanging out at the I-Connect007 booth. When we refer a trusted advisor to a company, that helps us to establish our industry credentials as well as strengthen our relationship with the client.
This year’s SMTAI was fairly well-attended, so there were enough owners/CEOs at the show to make it worthwhile, but they were not so busy with customers or suppliers that they could not talk with us. If there are not enough attendees, all of the owners go back to the shop, so this year’s crowd was just about right for our purposes.
Based on what I heard from owners and other attendees at the show, both the PCB and EMS industries seem to be doing pretty well, although some shops saw a bit of a slowdown over the summer. This could be a temporary pause, but it could also be a symptom of trade and economic uncertainty. The U.S. military budget is strong, there have been no government shutdowns for a while, and the overall economy is good. Especially in the PCBA sector, there seems to be a fair number of shops doing well, but perhaps an equal number of shops that have found themselves in trouble due to the component shortages, the loss of a major customer, high debt, and/or the tariff situation.
Overall, we see a lot of PCB and EMS shops changing hands over the next few years, mostly through consolidation, as many owners of smaller shops are at retirement age.
Tom Kastner is the president of GP Ventures, an M&A advisory services firm focused on the tech and electronics industries. He is a registered representative of StillPoint Capital, LLC—a Tampa, Florida member of FINRA and SIPC—and securities transactions are conducted through it. StillPoint Capital is not affiliated with GP Ventures.