Report Reveals 30% Increase In Manufacturing M&A Amongst Yorkshire Firms

Yorkshire Manufacturers Falling Behind When Attracting PE Investment

28.01.2014

David Shirt, Press Officer | 0161 838 3094

Deal activity involving Yorkshire-based manufacturing firms was at its highest level for five years during 2013, but the region continues to fall behind the North West and the South East when it comes to attracting private equity investment, says a new report.

According to data from law firm, Irwin Mitchell, Yorkshire manufacturers were the target of more merger and acquisition (M&A) activity during 2013 than at any time since 2008. This increase was despite a fall in the total volume of manufacturing related deals across England during the last 12 months.

The Yorkshire region’s share of manufacturing M&A activity across England reached 10.4 per cent in 2013. This was up from 7.9 per cent during the previous year and higher than East Anglia, the East Midlands, the North East and the West Midlands.

The share across the North West increased to 14.4 per cent, up from 12.2 per cent in 2013, whilst the South East maintained its number one position with 31.5 per cent of the total volume of completed manufacturing M&A.

The report also found there were more manufacturing deals which involved private equity. During 2013, 28.5 per cent of M&A included some venture capital, whilst in 2012 it stood at 20.6 per cent.

Although the Yorkshire region experienced a rise in the number of deals, its national share of venture capital investment in manufacturing fell last year. Despite the Yorkshire region seeing three more private equity-led manufacturing deals compared to 2012, the total percentage fell to 9.9 per cent from 10.6 per cent in 2012.

This figure is significantly lower than the North West and South East which had 17 per cent and 27.7 per cent respectively of private equity-led manufacturing investment by deal volume.

Expert Opinion
This report certainly reveals some encouraging signs as an uplift in deal activity points to greater confidence in the manufacturing sector generally.

“There are however a few areas of concern because although the sector as a whole saw more private equity M&A in 2013 compared to the previous 12 months, the increase in Yorkshire was not as high as in other regions.

“Compared to 2012, there was a sharp rise in 2013 in the proportion of manufacturing M&A which was financed through private equity. In fact there was a 29 per cent increase across England, but in Yorkshire the increase was much lower at 18.7 per cent.

“The manufacturing sector is clearly attractive to private equity at the moment. Faced with this growing appetite and an improving economic picture, ambitious companies here in the region should seriously consider this option whilst they explore opportunities for developing and growing their business.”
Andrea Cropley, Partner

This research is based on data sourced from Experian Corpfin’s proprietary M&A deals database.