Yorkshire manufactures see significant dip in M&A activity

Yorkshire-based manufacturing companies have a seen a 44% decrease in merger & acquisition (M&A) activity in the second quarter compared to Q1 of 2015, according to a new study.

National law firm Irwin Mitchell analyzed data from global information services firm Experian, and revealed that the number of manufacturing deals involving Yorkshire companies in the first half of the year is 81% lower than it was at the same stage in 2014.

Yorkshire companies’ share of manufacturing deals across England fell to 8.5% compared to last year when it is was 12.3%. The year’s current figure is the lowest it has been since 2012 when it was just 7%.

Furthermore, compared to the North West, the level of deal activity amongst Yorkshire-based manufacturing companies was down by a third after the first six months of the year.

Nationally, M&A activity in the sector in the first half of the year was reported at 257 - 10% lower than in 2014. But, Yorkshire manufacturing companies were the subject of only 4% of the deals in the sector which were backed by private equity.

Yorkshire’s current position is similar to that of the country as a whole, where the number of private equity backed transactions in the sector fell by 10%. Less than one in 10 manufacturing deals completed during the six months of 2015 was financed through private equity – the lowest proportion since 2012.

Andrea Cropley, Partner and Head of Corporate at Irwin Mitchell in the North of England, said: “These figures are disappointing but perhaps reflect the uncertainty around the General Election and also the general fall in output across the sector. Private equity interest has reduced substantially and I expect that it will remain so until the sector as a whole shows signs of consistent improvement.

“There are signs of improvement though and although the overall manufacturing sector is facing numerous challenges, there are plenty of sub sectors that are booming and I expect that this will fuel greater M&A over the coming months. Our deal pipeline looks strong for the rest of 2015 and I remain optimistic.”

Irwin Mitchell’s Corporate & Commercial team, which is one of the largest in the Yorkshire, consists of eight partners who advise businesses on a range of issues from M&A and fundraising to regulatory support in areas such as data protection.