Dealmaking proves strong
Despite the difficult economic landscape and stiffening headwinds, mergers and acquisitions (M&A) in 2022 involving UK manufacturers hit its highest level since 2016, according to a recent report.
It revealed that 1,344 manufacturing businesses were the target of M&A activity in 2022. This compares to 1,285 in 2021 and 1,231 in 2020.
The study also reported that activity among North West-based manufacturing companies actually reached a 10-year high in 2022.
Its figures show that 163 companies in the region were the target of M&A activity in 2022. This compares with 116 in 2021 and 112 in 2020.
The analysis, by law firm Irwin Mitchell, also revealed UK deal volumes in the sector in 2022 were at the second highest level in the last decade.
While activity dipped in the final quarter of 2022, the report and its findings highlight the robustness of the sector in face of growing economic challenges along with a continued appetite for deals from overseas buyers.
Last year 29 per cent of deals with a North West-based target business involved an overseas bidder, with the US being the most active, accounting for seven per cent.
Nationally in 2022, most transactions (57 per cent) were acquisitions while management buyouts (MBOs) accounting for four per cent of deals. Just one per cent were restructuring transactions compared to nine per cent in the previous year.
Venture capital also played a big part in manufacturing related deals in 2022 with 303 (22.6 per cent) of transactions being backed in this way. This compares to 295 deals in 2021.
However, in the North West, just 12 per cent of manufacturing deals were backed by venture capital, while in Yorkshire the figure was much higher at 27 per cent.
Meanwhile, 2023 has seen overseas investors continue to target North West businesses with a flurry of cross-border deals in recent weeks that has seen acquisitions by US, Australian and European companies.
The companies acquired range in sectors from engineering to software technology.
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