Manufacturing M&A Continues To Be Boosted By Private Equity

Sector Sees 9% Increase In Deals Compared to Same Period Last Year


David Shirt, Press Officer | 0161 838 3094

Significant private equity interest in manufacturing has continued to fuel an increase in M&A activity across the sector according to the latest industry report.

Law firm Irwin Mitchell, using data from Experian Corpfin, has revealed that manufacturers in the UK were the target of 199 deals during the first three months of 2015.

This represents a 9% increase compared to the same period last year (183) and a 3% rise compared to the final quarter of 2014.

The number of deals that completed during the period represents the highest Q1 performance since 2008 (266).

Significantly, the report highlighted a large increase in manufacturing M&A activity which involved private equity.

In the first three months of 2015, 27% of manufacturing deals involving UK firms were PE-backed. This compares to 21.8% during the whole of 2014.

South East-based manufacturers were the subject of 30% of all M&A activity across England, however this was the lowest proportion in the seven years covered in the report.

The West Midlands performed well with 27 manufacturing deals completing in the period - 10 more than the same period in 2014. One third of the deals were backed by private equity.

Another region which experienced a big rise in manufacturing deal activity was the North East.

Companies in the sector here were the target of 16 deals - almost double the number which completed in the same period of 2014. Similar to the West Midlands, over 30% of transactions received PE backing.

Chris Rawstron, Partner and Head of Corporate & Commercial at Irwin Mitchell, said:

Expert Opinion
“Once again we are seeing the manufacturing sector generating significant levels of M&A activity. The sector performed well during the second half of 2014 both in terms of deal volumes and private equity and I’m pleased to say that this confidence has continued into the first three months of 2015.”
Chris Rawstron, Partner

Published at the beginning of April, the Markit/CIPS Purchasing Managers’ Index for the manufacturing sector reached 54.4 during March.

This was slightly higher than in February and represents an eight month high. Much of the growth was attributed to strong domestic demand.

In addition, UK employment within the sector rose for the 24th month in a row.

Expert Opinion
“At the end of 2014, growth in the manufacturing sector dipped slightly but the latest Markit/CIPS figures demonstrate how robust the sector is. I expect this confidence will continue to feed into a further increase in M&A levels and I also think it likely that private equity interest will continue to grow.”
Chris Rawstron, Partner