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Focus on Manufacturing

The Rise of Private Equity

Manufacturing M&A continues to be boosted by Private Equity

Significant private equity interest in manufacturing has continued to fuel an increase in M&A activity across the sector, according to research by Experian, the global information services company.

The report 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.

Aside from financial and insurance services, the manufacturing sector contributed to the largest amount of deal activity in the UK. The main industry involved in Q1 2015 M&A transactions in Yorkshire and Humber was manufacturing.

The report highlights more than 30 completed or near completed Yorkshire & Humber deals in the manufacturing space during the first three months of this year. Unsurprisingly, the West Midlands also performed well with 27 manufacturing deals completing in the period - 10 more than the same period in 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.

Significantly, the report also shows a large increase in manufacturing M&A activity which involved private equity. In the first six months of 2015, 27% of manufacturing deals involving UK firms were PE-backed. This compares to 21.8% during the whole of 2014.

Irwin Mitchell remains one of the most active legal advisors in the M&A market in the UK, appearing in the top 20 for deal advisory work nationally and top three in Yorkshire & Humber.

In supporting our clients on recent transactions, such as the disposal of Midlands-based door manufacturer and distributor JB Kind, the disposal of Rainbow Dust Colours to food manufacturer Real Good Food, and the recent equity investment in hybrid car manufacturer Magnomatics, we at Irwin Mitchell have witnessed first-hand the strong performance of the manufacturing sector in their M&A and investment activity in the UK.

Although there looks to have been a small dip in activity over the last few months pending the outcome of the General Election, we expect the sector to continue to perform well and generate increasing levels of M&A activity and opportunities for private equity funds throughout 2015.

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