Jabil Circuit Inc., an electronics-manufacturing service provider, is working on 13 acquisitions ranging in price from less than $1 million to hundreds of millions of dollars, according to Joanne Moretti, senior vice president of marketing.
“You’re going to see us be very aggressive in M&A,” Moretti said in a recent interview. The purchases will bring expertise in building wearable devices, consumer packaging and health care-related products, she said.
Jabil has 180,000 employees in plants around the world that make electronic devices for Ericsson AB, Cisco Systems Inc., Hewlett-Packard Co. and other technology companies. The St. Petersburg, Florida-based company has also won contracts to make products for Apple Inc., which fuels 18 percent of Jabil’s revenue, according to data compiled by Bloomberg.
Jabil is seeking to diversify to avoid becoming too dependent on electronics manufacturing, according to Moretti. The company paid $665 million in 2013 to buy NyPro Inc., a manufacturer of plastic components used in health-care products and consumer packaging. In June, Jabil bought Clothing Plus, which specializes in building electronic sensors into fabrics. It’s also purchased smaller engineering firms, including AOC, which makes optical-networking technology.
“It’s not great for 20 percent of our revenues coming from just one place,” Moretti said.
The contract manufacturer has also had some success in the wearables market. The company is also involved in the manufacturing of GoPro Inc.’s action cameras, said people with knowledge of the matter, who asked not be identified because the contract hasn’t been made public. It also assembles the electronic bracelets that visitors wear at Walt Disney & Co. theme parks to pay for rides and food. Jabil is also one of the manufacturers for some parts in Apple’s iPhone 6, one of the people said.
Jabil will probably do more small acquisitions to round out its manufacturing capabilities and can easily afford to do a deal for as much as $750 million, given its cash flow, according to Jason Pompeii, an analyst at Fitch Ratings Ltd.
“To the extent they can move into new markets that are more fragmented, it will drive margin expansion,” Pompeii said.