Analysis Reveals Reduction In Cross Border Transactions

Manufacturers in the West Midlands experienced an 11% fall in deal activity in the first quarter of 2016, says a new report.

According to the latest analysis of Experian data by Irwin Mitchell, manufacturing deal activity in the West Midlands fell from 35 in Q4 2015 to 31 in the first three months of 2016.

The region’s share of UK manufacturing M&A activity remained the same as the level for 2015, however, there were signs that there could be more private equity backed manufacturing deals in the future. Last year in the West Midlands 9% of manufacturing deals were financed through private equity but already this year, the figure after the first three months is 15.7%.

The data also revealed that only three West Midlands-based manufacturers bought foreign companies in the first three months of 2016. This represents a fall compared to Q4 in 2015 when six companies in the region targeted and acquired overseas businesses.

The study also found there was a fall in the number of deals where manufacturers in the region were bought by overseas based firms. According to the data, during Q1 of 2016, five manufacturing firms were bought by a foreign organisation compared to seven in the final three months of 2015.

Expert Opinion

“It’s not surprising given the current economic and political uncertainty that deal volumes in the sector have fallen in the most recent three month period. It is however encouraging to see such a high proportion of private equity backed deals in the sector.

“The region’s manufacturers have been very successful at attracting foreign investment and this continues to drive a significant proportion of deal activity in the sector. It is however important that as confidence levels start to go up, firms based here don’t ignore the growth opportunities that exist from targeting foreign companies themselves.”
Nick Dawson - Partner

Last year Irwin Mitchell advised Birmingham-based Hills Numberplates on the acquisition of French number plate manufacturer Faab Fabricauto from 3M’s Traffic Safety and Security Division for an undisclosed sum.

Irwin Mitchell recently appeared fourth in Experian’s UK league table of the most active M&A legal advisors during the Q1 2016. In the Midlands, the team were ranked in second place.