Cemtrex’s run in EMS ended today with a decided whimper. The New York-based company sold its remaining contract assembly assets to a German private equity group for about $7 million.
It brings to a close one of the stranger stories in recent EMS memory. Cemtrex grew through acquisition, buying up a German EMS company, and later another, and green-fielded plants in Romania and India.
Focus was not its strong suit. Along the way, it became involved in virtual reality software and proprietary IoT device design and manfuacturing. It set a goal of $500 million in revenue, but its most recent quarterly results, released this week, put it on a run rate of about $90 million annually, which is behind its pace of just a year ago.
Then there was bewildering and lame hostile takeover attempt of Key Tronic, at the time a Top 50 EMS in terms of revenue. In offering a 1:1 stock swap, Cemtrex called out the larger EMS for its seemingly underwhelming profitability. Key Tronic’s response — at once clinical and dismissive — was one for the ages: “Our initial research shows [Cemtrex] reports approximately $45 million of EMS revenue. In our opinion, this does not qualify [Cemtrex] to make any statements as to how it might operate an EMS business like KeyTronic which is over 10 times [its] current size in terms of revenue.”
Cemtrex never filed the paperwork for a potential acquisition and the proposal quietly vaporized. And today, so did its aspirations of EMS supremacy.