Deal activity takes a dive after “uncertainty” in manufacturing

DEAL activity in Yorkshire’s manufacturing sector fell by 81% in the first half of 2015, compared to last year, a dive which has been attributed to “uncertainty” in the sector.

M&A activity fell by 44% on the last quarter compared to the first three months of 2015, and only 4% of the deals that were done in the sector were backed by private equity.

The level of deal activity from Yorkshire manufacturing firms was down by a third on the North West (the only region that did not show a decline in deals) after a “disappointing” set of output figures for the sector.

Law firm Irwin Mitchell analysed data from Experian to distill these figures, and Andrea Cropley, partner and head of corporate at Irwin Mitchell in the North of England blamed the uncertainty in politics, specifically the General Election, for the dip.

She said: “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.”

Experian’s figures showed the manufacturing sector’s share of deals across England fell to 8.5%, down from 12.3% last year.

This is the lowest level since 2012.

The UK deal landscape mirrors this regional downturn. The number of private equity backed transactions in the sector fell by 10%, and less than one in 10 manufacturing deals completed in the first six months of the year were financed through private equity.