Member Article

Yorkshire sees 30% increase in manufacturing firm deals

Yorkshire manufacturers were the target of more merger and acquisition (M&A) activity during 2013 than at any time since 2008.

Deals involving Yorkshire-based manufacturing firms were at their highest levels for five years according to 2013 data from law firm Irwin Mitchell.

However the region continues to fall behind the North West and the South East when it comes to attracting private equity investment.

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% in 2013. This was up from 7.9% 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%, up from 12.2% in 2013, whilst the South East maintained its number one position with 31.5% 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% of M&A included some venture capital, whilst in 2012 it stood at 20.6%.

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 PE-led manufacturing deals compared to 2012, the total percentage fell to 9.9% from 10.6% in 2012.

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

Andrea Cropley, Partner and Head of Irwin Mitchell’s Corporate team in the North of England said: “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% increase across England, but in Yorkshire the increase was much lower at 18.7%.

“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.”

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

This was posted in Bdaily's Members' News section by Clare Burnett .