North West sees fall in M&A activity

Deal activity involving North West-based manufacturing firms fell slightly in the first quarter of 2014 compared to the last three months of 2013, according to a new report.

According to Experian data and analysis from law firm, Irwin Mitchell, manufacturers in the region were the target of 27 deals during the first three months of 2014 compared to 33 during Q4 last year.

The figure did represent an increase compared to the same period in 2013 when only 17 deals in the sector were recorded.

The North West’s share of manufacturing M&A activity across England rose slightly to 14.7% from 14.4%. This is higher than Yorkshire, the West Midlands, the South West, the East Midland and East Anglia.

The South East however strengthened its number one position with 36.6% of the total volume of completed manufacturing M&A.

The report also highlighted a fall in the percentage of manufacturing deals which involved private equity. Nationally in the first quarter of 2014, the figure stood at 15.3% whilst during 2013, 28.5% of M&A included some venture capital.

Although only five PE-backed manufacturing deals completed in 2014 Q1 within the North West, the region accounted for 18.5% of all of these types of deals nationally.

Andrea Cropley, partner and head of Corporate in the North of England at Irwin Mitchell said: “Overall the manufacturing sector performed well during Q1 with a 12% increase in the number of deals compared to the previous three months period.

“Although this is very encouraging and hopefully will continue during the rest of the year, it was disappointing to see a reduction in the amount of deals backed by private equity.

“The manufacturing sector is certainly proving to be driving a great deal of M&A activity and I expect that there will be an increase in levels as the year continues. 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.