Houlihan Lokey – Circular Tech, 4Q 2023

The Circular Tech landscape is currently experiencing various dynamics, such as environmental sustainability awareness, regulatory pressures, and a focus on circular economy principles. Organizations are seeking comprehensive IT asset management solutions, creating demand for specialized providers. Despite a projected slowdown in global IT spending growth in 2023, a rebound is expected in 2024. IT services spend is anticipated to grow, with the circular tech sector evolving with financial and strategic investors looking for high-quality assets. OEMs are facing pressure from EU regulations to offer refurbished devices but are hesitant to move into IT asset disposal directly. Device-as-a-service is a preferred option for OEMs, while leasing providers like CHG and Econocom are looking to enhance their value recovery capabilities. U.S. players are eyeing Europe as a target for expansion, and there is increasing interest from private equity in the Circular Tech markets. The industry is dynamic, with consolidation happening among OEMs, IT distributors, VAR, and private equity-backed platforms.