Manufacturing M&A Boosted By Return Of Private Equity

UK Deals Across The Sector Record 23% Annual Increase


David Shirt, Press Officer | 0161 838 3094

UK manufacturers saw a dramatic increase in deal activity in 2014 as a result of increased economic confidence and a substantial increase in private equity interest in the sector - according to a new report.

According to the latest data* and analysis from Experian on behalf of law firm, Irwin Mitchell, manufacturers in the UK were the target of 780 deals during 2014. This compares to 634 in 2013 and is the highest number of transactions completed in a year since 2008 (860).

Although the number of completed deals in the final quarter dipped below 200, the actual figure of 193 represents the largest number of transaction completed in the last three months of the year since the survey began.

The South East strengthened its number one position with 36.6% of the total volume of manufacturing M&A, whilst the North West’s claimed 14.7% of deals. This percentage was higher than Yorkshire, the West Midlands, the South West and the East Midlands.

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

In the last six months of 2014, 27% of manufacturing deals involving UK firms was PE-backed. This represented a considerable rise compared to the first six months of the year when only 15.6% of sector deals were funded through private equity.

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

Expert Opinion
It is very encouraging to see such a rise in manufacturing M&A. The sector performed well during the second half of 2014 and this confidence certainly contributed to a big increase in the levels of private equity backing.

“The levels that we saw during the last six months of 2014 were similar to those that we saw during 2013 when 28% of manufacturing M&A was private equity backed and it will be interesting to see whether this will continue.

“We believe that deal flow within the sector will remain strong and although recent surveys pointed to a tough December for manufacturers generally, the sector has remained resilient and has continued to grow.”
Chris Rawstron, Partner

Published at the beginning of January, the Markit/CIPS Purchasing Managers’ Index reached 52.5 during December. This compares to 53.3 in both October and November. A figure above 50 suggests that the sector is growing.

Despite the fall, the overall UK manufacturing activity was strong in 2014 and UK employment within the sector rose for the 20th month in a row during December.

Manufacturing Mergers & Acquisitions in 2014

*Data sourced from Experian’s proprietary Corpfin M&A deals database.