Compliance Standards report says large corporations and investors will push mergers and acquisitions.
The Miami-based research group Compliance Standards
has released a report that addresses the changing landscape of the electronics recycling industry. The report, titled The ITAD and Electronic Recycling Competitive Landscape: The Momentary Vanishing of the Pure-Play ITAD Companies
, forecasts that the electronics recycling and IT sectors are in the middle of a mergers and acquisitions (M&A) wave. The M&A push will be driven by large corporations and investors looking to take advantage of expected solid growth prospects in the broad environmental sector, Compliance Standards says.
The report notes that small, independent companies that are active in the market are being acquired, leaving a vacuum in this space. This move is creating longer-term potential for mergers among smaller entities that will remain active in the market and will seek to be competitive, the report states.
“Despite investor interest in the ITAD (IT asset disposition) and e-cycling companies, ongoing challenges are the same we’ve seen in the recent past, including the need to aggregate aging and soon-to-be obsolete assets for decommissioning purposes in manners that make economic sense,” says Alec Gordon, an analyst with Compliance Standards overseeing M&A activity and the competitive landscape.
Budgetary pressures have put a strain on many large organizations that consume IT equipment. As such, a growing number of IT executives and procurement managers have been looking for creative ways to extract value where none existed before, largely to contain recycling cost and, when possible, generate a return if decommissioned assets can be remarketed, according to the report.
“Our report looks at the most active companies on the M&A front, what they are looking for, and profiles those involved in electronics recycling and ITAD,” says David Daoud, managing director and principal analyst at Compliance Standards.
The report segments the type of companies looking at a competitive position for long-term growth, from OEMs (original equipment manufacturers) to distributors and retailers, and from reverse logistics firms to contract manufacturers. Non-IT firms vary from freight and transportation companies to waste collection firms.
More information on the full report is available at compliancestandards.com