What’s the SCOOP – Enics and GPV Merge to Form Europe’s Newest Electronics Giant

By Philip Spagnoli Stoten, Writer and Founder of SCOOP

Last week we saw the news that two of the largest EMS companies in Europe would merge to form an even larger company. Denmark’s largest and Finland’s largest EMS companies have a lot to bring to the party and will probably end the year with sales in excess of US$1B, only the second European EMS to do so after Zollner.

In an episode of MADE IN EUROPE, recorded in December last year with Dieter Weiss and Eric Miscoll, as they ended a tour of European EMS factories, I predicted that by the end of 2022 there would be three EMS companies with sales over $1B. One more to go… The previous episode of MADE IN EUROPE had included GPV CEO Bo Lybæk as a guest and we had talked at length about the trends in Europe and the potential as EMS business becomes more and more regionalized and OEMs look for new stronger partnerships with their manufacturing partners.

The new company, whose name has not been announced, will be co-owned by the current owners of GPV and Enics, with Nasdaq Copenhagen listed industrial conglomerate Schouw & Co owning 80% while  Ahlström Capital B.V, (a wholly owned subsidiary of the family-owned investment company Ahlström Capital) will hold 20%. The new company, let’s call it Enics-GPV for now, will have 7,500 staff spread across more than twenty factories in Europe, North America and Asia. Today, Enics has seven factories in Europe and Asia across Finland, Sweden, Estonia, Slovakia, China, and Malaysia, while GPV has twelve factories located in Denmark, Switzerland, Germany, Austria, Slovakia, Mexico, Sri Lanka, and Thailand.

“This is the largest transaction in the history of Schouw & Co., and we are very pleased to have reached an agreement with both Ahlström Capital, and GPV’s new partner, Enics. Schouw & Co. and Ahlstrom Capital share similar values and both companies’ legacy and long-term strategic outlook provided an excellent climate for negotiation,” explains CEO Jens Bjerg Sørensen from Schouw & Co. who is the current chairman of GPV and will serve as chairman of the merged company. He continues: “At Schouw & Co., we have a clear strategy of making long-term investments in market-leading companies. With the merger between GPV and Enics, we will now create a leading player that can measure up to even the largest EMS companies, and which within a foreseeable number of years can reach DKK 10 billion in revenue.” 

The current combined revenue of Enics-GPV is around DKK7Billion, very close to US$1Billion. The transaction values the combined businesses at around DKK4Billion, around $570Million.

Over the last year I was lucky enough to interview both CEOs, Enics Elke Eckstein and GPVs Bo Lybæk as part of my EMS@C-Level series. You can find both interviews, along with the aforementioned MADE IN EUROPE episodes at the end of this feature, on youtube or in audio form on your favorite podcast platform. Following the news I listened again to both interviews and was struck by the vision of these two CEOs and their deep understanding of the current trends in the industry. They both understand the changing nature of the relationships they must have with their OEM customers as EMS players shift from being a supplier to being an “electronic manufacturing partner” whose job it is to manage product life cycles, supply chains and fulfillment ecosystems, ensuring the delivery of solutions directly to their customers’ customers.

This new Scandinavian headquartered EMS immediately lifts itself to a solid number two in Europe and I expect it to continue to be ambitious in its growth. The industry needs these larger players to have global ambitions as they go beyond just chasing scale and look to provide a diverse service and footprint that will support the regional needs of global electronics brands. This merger brings together a great deal of talent and as Bo Lybæk leads the integration he will need to harness that talent to fulfill the huge potential of this new group. This talent has seen these two great companies not just survive, but thrive through the recent disruptions, be that the trade war, the pandemic, or parts shortages. I am sure the business will continue to thrive, regardless of what the next challenge or disruption might be.

As for my prediction, I still expect the second half of 2022 to provide more consolidation in the industry and I stand by my prediction of three European headquartered EMS companies with sales north of US$1Billion by the end of the year. 

Watch this space!!

And watch these videos if you have time (sorry about the haircut in the second one, I blame lockdown!!)…