EMS@C-LEVEL
As Forbes, Entrepreneur, Fast Company and SCOOP writer, Philip Stoten, continues to talk to EMS (Electronic Manufacturing Services) executives he learns more about their individual and collective experiences and their expectations for their own businesses and for the entire electronic manufacturing industry.
EMS@C-LEVEL
Scaling Smarter: Why InCap Is Acquiring Lacon Group And What It Unlocks, with CEO Otto Pukk
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Deals change the game only when they change what you can do for customers. That's the heartbeat of our conversation as we break down InCap’s planned acquisition of Lacon Group, a Germany-based EMS and ODM player with sites across Bavaria, northern Germany, and Romania. In this conversation with InCap CEO Otto Pukk, I dive into why Germany’s the cornerstone of European EMS, how local engineering talent shifts the work from build-to-print toward design collaboration, and why this move is about smarter capacity—geography, capability, and resilience—more than raw scale.
We map the value Lacon adds: roughly €70 million in revenue, a balanced sector mix across defense, rail, industrial, and medical, and ODM-grade design services that tighten DFM, accelerate NPI, and strengthen lifecycle support. Then we connect the dots to InCap’s existing strengths in Europe, USA and India, showing how small and mid-volume German programs can ramp efficiently across a broader network without sacrificing proximity or quality. The result is a more versatile platform for customers who want speed, engineering depth, and flexible capacity in an uncertain market.
Consolidation across European EMS is heating up, with aggressive moves from regional leaders and higher multiples for high-quality assets. We unpack what’s driving the surge—defense and aerospace demand, AI and data center hardware—and why portfolio balance still matters when geopolitics can shake forecasts. Culture fit plays a starring role here; with multi-site teams and over 600 new colleagues to integrate, shared values and a strong group spirit make the difference between a deal that looks good on paper and one that delivers in practice.
We close with a grounded outlook: stronger Q4 than Q3, cautious optimism for 2026, and a clear focus on integration and operational excellence—harmonizing processes, unlocking cross-site synergies, and standardizing engineering workflows. If you’re tracking the future of EMS, from German proximity to India-based scale, from ODM capability to defense readiness, this is a deep, candid look at how strategy meets execution. Subscribe, share with a colleague who follows EMS M&A, and leave a review with your take on where the next strategic foothold should be.
EMS@C-Level is hosted by global inspection leaders Koh Young (https://www.kohyoung.com) and Global Electronics Association (https://www.electronics.org)
You can see video versions of all of the EMS@C-Level pods on our YouTube playlist.
Welcome And Guest Introduction
SPEAKER_00Hello, I'm Philip Stoughton from My House to Yours. Welcome to EMS at Sea Level. I am joined by the inimitable Otto Puck from InCap. Otto, always an absolute joy to chat to you and always so much going on at InCAP. Tell me a bit about your latest um acquisition news in Germany.
SPEAKER_01Yeah, no, thank you. Thank you, Philip. It's always a pleasure talking to you as well in that sense.
Announcing The Locon Group Deal
SPEAKER_01No, as uh you saw here here uh we uh we um uh had had an announcement here last weekend and uh uh have acquired or are about to acquire in that sense we're still uh awaiting uh the FDI filing. So so uh but uh Locon Group in Germany and and we are quite excited about it. It's a company we have been following for for several years now and and and uh seems to be a good fit for for us in INCAP.
SPEAKER_00Yeah, so give me a little bit of an idea of the scale and size of the business uh and the footprint, and then tell me a little bit about what attracted you to them in the first place.
Scale, Footprint, And Markets
SPEAKER_01Yeah, Locum Group is is uh yeah, of course it varies a little bit, but around 70 million in in revenue, and and they have have uh uh three locations in Germany so so so both in the in the down in Bavaria but up in in Northern Germany as well, and covered the urban market well, and and then they have a large facility also in Romania that that uh so so so it's a good footprint, a well-balanced company, good customer portfolio with with with good customers and and and so in um growing industry like defense, of course, but but but also in railway and and industrial and medical segments. So I think in it a good fit for us in in in in in-cap in essence.
SPEAKER_00Yeah, when I look at acquisition, um and it's been a really fascinating year for acquisition, and there's been a kind of an acceleration towards the end of the year, which we'll talk a little bit about. But when you look at an acquisition, you're looking at doing one of several things. It's it's a capability, it's a capacity issue, it's maybe a geographical issue, or it's maybe trying to reach specific markets. Were any of those in your strategy, or is it just part of a scaling up?
SPEAKER_01No, uh of course, uh that was also in
Strategy: Capability, Capacity, Geography
SPEAKER_01in our strategy. We have been looking at uh I've been talking a long time about both the US market but also the German market, and German market being the biggest EMS market in Europe, and and uh uh and and there, I think if you look at Locon, there they are focusing on a small to to mid volume, and and and and we have capability to go beyond that in our other European factories, but also the India. And and I think that combination could be very interesting uh moving forward that we have additional service offering and and and so when it cape comes to the capacity, but then also capability.
ODM Skills And Broader Services
SPEAKER_01Locom profiles themselves as an ODM company and have also engineering and and how to say design capabilities and and and in-kepp we have been working on on more and more to broaden the the service offering towards our customers. And and and of course, this is also uh in line with that uh thought that we have uh can offer somewhat more services towards our customers. So, no, overall I think it's it's of course location and market, but also uh capacity and capability that comes into
Value Of Combined Capabilities
SPEAKER_01play.
SPEAKER_00Yeah, and I think that capability play is really fascinating because you bring their capability to your customers, you bring the additional capabilities you have to their customers, and it makes the you know the uh the sum of the parts greater than the uh you know the size of the original parts, and that's real add
EMS M&A Acceleration In Europe
SPEAKER_00value. As I say, we've seen an acceleration in um MA activity over the last few months, and we've seen a few companies being super aggressive, not least uh Hansa out of Scandinavia, um, with some impressive deals, but also Circor. We're seeing a lot happening in terms of those medium to larger size EMS companies in Europe, and that positioning for the for the top five places is becoming very competitive. How do you see that and does that surprise you?
Chasing Defense, Aerospace, And AI
SPEAKER_01No, I think that that if you look in in there have been stagnation on the market when it comes to general growth, and and and and then you have uh defence and aerospace, and and perhaps around AI data centers is the only growth drivers, and many companies are chasing very aggressively uh to get into these uh fields, and especially then defense and aerospace. Uh in INCAP, of course, we with this uh acquisition we're also tapping into the defense a little bit more. Even if I would say that we we still look at business that it should be balanced, and then also after after uh if the geopolitical situations in the world changes, then it should be be balanced. But but I think I think I think that is what has been driving it, and then yeah, we are also surprised to see. I I didn't think that we would see you know no multiple starting with two in that sense in the EMS industry, but but uh clearly there is is demand for some of these companies and and and uh and uh the they go quite expensive as well. But but I think uh overall then then from Inca's perspective, then then we follow our the same strategy that we have had on MA's for years in that sense. And and and and uh I'm I'm quite happy with that.
SPEAKER_00Yeah, and
Culture Fit And Integration Confidence
SPEAKER_00the other thing I when when I look at uh um an acquisition is is the is the cultural fit. When I look at InCAP, there's very there's a super strong family culture there, there's a super strong kind of team of um you know that that like to that like to have fun as well as deliver great products and services to their customer. Was that something that you considered when you looked at this acquisition? It it really a cultural fit does make the integration much easier, doesn't it?
SPEAKER_01Yeah, no, it does. And and I think Locon has has also they they all they are split up in many sites in that sense. Of course, those sites have some kind of own own um uh uh own systems and so when when it comes to HR, but but at the same time they're all have have a good group spirit. So so I think I think uh that that will work very well in the in-cap uh system as well. And and I'm not that worried about that part of the integration in that sense that we have great people as you you you mentioned, and um uh yeah, sure sure we will find great people in Locan as well. At least those we have met have been been been wonderful, so so uh it's it
Outlook: Q4 Strength And Uncertainty
SPEAKER_01uh should not be any problem uh getting along in that.
SPEAKER_00Yeah, no, it's it's uh it's an exciting part of the whole process, isn't it? And it's one you've done very successfully with the uh with the previous acquisitions. As we wrap up 2025 and we look to 2026, what do you see as the um position at the end of the year? And what do you see as the challenges and opportunities going into next year?
SPEAKER_01Yeah, we haven't given out our steering for next year yet, but but as I said, when during Q3, then then our Q4 will be stronger than than than the previous quarter. And and and and I I I think we will uh there is still, you know, there is still uh uncertainties on the market, and and and so when it comes to the war in Ukraine and and and and uh what what our friends in the US administration uh we will uh uh do and and and how how how that will disturb the world world economy. But but but uh overall I think there is still there's some kind of positiveness uh in it. We perhaps you don't see it yet, but you hear it at least. That peep people and and it seems to be so that the market wants to wants to start growing, wants to do something. So so so let's see. But once we give our steering out, then then then we'll have a bigger look at it. But but uh at least the end of the year will be stronger for us.
SPEAKER_00Yeah, and when you look to 2026, what are the what are the things that you're looking to do? Are you are you happy with your footprint? Are there potential additions to your footprint? Are you looking at the operational excellence side and the use of AI within the business? What are what are they the things you're looking forward to getting your teeth into in 2026?
2026 Priorities: Integration And Excellence
SPEAKER_01Uh of course we will always keep an eye eye open for for for good targets, and I think think in some markets like the US market uh that that we could have more presence than we have today. Uh, but that said, of course, with a larger acquisition like this, with with Locum, we will focus very much on integration of that acquisition and at the same time then also focus on our operational excellence and and how we can draw synergies uh between the the different units. So that is something we we of course do all the time, but but I think uh this yeah next year we'll have extra focus on that because it's uh a big company, it's uh over 600 more employees than we need to integrate into to our family, and then and of course that that will take uh uh first row in that sense in in our planning.
Closing And Well Wishes
SPEAKER_00Yeah, I really like the footprint you have the Eastern Europe, the Western Europe, the addition of Germany, the uh the fact that you have India in the mix, the fact that you have uh the US in the mix, it really does make a very robust offering as you as you look forward and as you add different technology capabilities in there, and you know you continue to push that culture, it um it bodes well. So all the best for 2026. Thanks so much for talking to me, and I look forward to chatting again soon. Thanks.
SPEAKER_01Yes, thank you very much.