West Midlands manufacturing sector sees growth in deals activity
MANUFACTURERS in the West Midlands saw a 12.5% rise 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.
Latest data and analysis from Experian on behalf of law firm Irwin Mitchell, shows manufacturers in the West Midlands were the target of 81 deals during 2014. This compares to 72 in 2013 and is the highest annual number of transactions completed within the region since 2008 (92).
Pointing to a strong end to the year across the region, the report highlighted that 27 deals were completed in the final quarter of 2014 – the largest number of transaction in the last three months of the year since the survey began and 35% more than the number of 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, 27.6% of manufacturing deals involving West Midlands-based manufacturing firms were PE-backed. This represented a considerable rise compared to the first six months of the year when 20.5% of sector deals were funded through private equity.
Nick Dawson, Corporate & Commercial Partner at Irwin Mitchell in Birmingham, said: “The West Midlands region has performed extremely well during 2014 in terms of manufacturing M&A and confidence within the sector has certainly contributed to a big increase in the levels of private equity backing.
“The levels that we saw during the last six months of 2014 were similar to those during 2013 when 26 of manufacturing M&A was private equity backed and it will be interesting to see whether this continues.
“We believe that deal flow within the sector will remain strong and although recent surveys have pointed to a tough December for manufacturers generally, the sector has remained resilient and has continued to grow.”
