Q4 2025 Update for Electronics and Electrical Industry

The electronics and electrical industry saw an increase in deal activity in the fourth quarter of 2025, with 145 deals compared to 117 in the previous quarter. However, private equity interest in mergers and acquisitions decreased slightly, with 11 deals announced in Q4 versus 12 in Q3. Publicly traded valuation multiples were mixed during this period.

Overall, financial performance in the industry was positive in Q4. Sales were up across all sectors, and profit margins showed improvement. Capital spending varied among different segments, with Electronic Manufacturing Services (EMS) seeing an increase of nearly 12%, while Distributors and Diversified companies experienced a decrease of 3.9% and 3.6%, respectively.

Despite the fluctuations in capital spending, balance sheets in the industry remain healthy. The National Electrical Manufacturers Association conducted a survey in January, revealing a business confidence index of 56, a slight decrease from 58 in October. However, the outlook for the next six months remains optimistic, with a score of 61 (anything above 50 indicates expansion).

Strategic buyers in the electronics and electrical industry still have significant funds available for acquisitions, indicating ongoing interest in further growth opportunities. The overall trajectory of the industry appears positive, with continued investments and expanding business activities.

In conclusion, the electronics and electrical industry experienced a mix of trends and developments in the fourth quarter of 2025. Despite some fluctuations in certain aspects such as private equity interest and capital spending, the industry as a whole showed growth and improved financial performance. With healthy balance sheets and ample opportunities for acquisitions, the outlook for the industry remains positive as it moves into the future.