WM manufacturing M&A activity reached 10 Year high in 2022
West Midlands-based manufacturing businesses were the subject of more mergers and acquisitions (M&A) activity in 2022 than at any point in the last 10 years.
Irwin Mitchell has analysed Experian’s Market IQ database and revealed that 127 West Midlands manufacturing businesses were the target of M&A activity in 2022. This compares to 104 in 2021 and 121 in 2020.
According to Irwin Mitchell, deal volumes in the sector in 2022 were at the highest level in the last 10 years with the average activity level between 2013 and 2021 standing at 112.
In 2022, most manufacturing related transactions (67%) were acquisitions while less than 1% of deals were restructuring transactions compared to 25% in 2020.
According to Irwin Mitchell, overseas bidders continue to have a big impact on UK M&A in the manufacturing sector. Last year 35% of deals with a West Midlands-based target business involved an overseas bidder. Both the US and Sweden accounted for 9% of these bidders.
Venture capital played a big part in manufacturing related deals in 2022 with 303 (22.6%) of transactions being backed in this way. The figure in the West Midlands was relatively low at just 10%. Over a third of deals (36%) of deals in London in the were VC backed. In the north-west, just 12% of manufacturing deals were backed by venture capital, while in Yorkshire the figure was 27%.
Emma Callow, corporate partner at Irwin Mitchell in Birmingham and manufacturing sector expert, said: “This latest analysis may look surprising bearing in mind the challenges faced by economy last year and although activity dipped in the last quarter of 2022, these figures certainly reflect how resilient the manufacturing sector is. We have seen deal flow in the sector continue to be strong and early signs show that activity in 2023 may be even stronger than 2022.”
Irwin Mitchell’s corporate team has strong credentials in the manufacturing sector. Last year it advised Motus Holdings (UK) Limited on its £182m acquisition of UK-based automotive components supplier, Motor Parts Direct (Holdings) Limited. It also helped waste management group Reconomy complete its acquisition of leading recycling firm Casepak and sister company, Oceala. The team has also advised private equity firm Acorn Growth Companies on its investment in full-service aftermarket supplier of rotable parts for commercial aircraft, Aerospares 2000.
