In an Embedded Computing interview Adlink's general manager P.J. Go describes the motivation behind Adlink's recent acquisition of U.S. based Ampro:
The main reason we wanted to buy Ampro is because the company plays very strongly in the U.S. Military, aerospace, and medical markets. We have had fairly limited success penetrating those markets here in the United States. In addition, Ampro gives us a great revenue base in the United States. Our U.S revenue will represent 35 percent of the company’s total revenue, instead of the 15 percent that it represented previously.
Ampro also adds to our toolkit expertise in extended temperature and the shock and vibe specs required by the military and aerospace market. Ampro is used to building boards that can go from -40 ºC to +85 ºC for operating temperatures. ADLINK had been doing -20 ºC to +70 ºC or usually, 0 to 50 ºC.
Of course, as noted earlier, this makes Adlink the third largest IPC provider in Taiwan behind Advantech and ICP Electronics.
This horizontal merger is classic product and market diversification through merger and acquisitions (M&A). Many companies do this so as to develop better positions in foreign markets, to secure more reliable distribution networks in new markets and to purchase new expertise and product lines. Clearly Adlink are hoping to learn how to develop more durable systems. One of the biggest challeneges for Adlink will be cross-cultural management. Despite this, this acquisition seems to be a big win for Adlink. However, as with most M&A, only time will tell.
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