Member Article

Manufacturing M&A in Yorkshire boosted by return of private equity

Manufacturers based in Yorkshire saw a 7% 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 Yorkshire were the target of 77 deals during 2014. This compares to 72 in 2013 and is the highest number of transactions completed in a year since 2008 (82).

Pointing to a strong end to the year across the region, the report highlighted that 20 deals were completed in the last three months of 2014 - the largest number of transactions completed in the last three months of the year since the survey began and more than double the number of completed deals in the same period of 2013.

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

In the last six months of 2014, 27.7% of manufacturing deals involving Yorkshire-based manufacturing firms were PE-backed. This represented a considerable rise compared to the first six months of the year when only 14.6% of sector deals were funded in this way.

Andrea Cropley, Corporate & Commercial Partner at Irwin Mitchell, said: “The Yorkshire region has performed well during 2014 in terms of manufacturing M&A and confidence within the sector has certainly contributed to a big increase in 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 these levels of activity 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.”

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.

This was posted in Bdaily's Members' News section by Robert Beaumont .