According to Experian, which conducted its research on behalf of law firm Irwin Mitchell, UK manufacturers were the target of 236 deals in the third quarter of 2014. The total number of deals in 2014 now stands at 619, 28% more than the same period in 2013.
Reflecting the current strength of the sector, Irwin Mitchell’s report said that not since the second quarter of 2008 have the number of manufacturing deals completed in a three month period been this high.
The research reflects the current flurry of M&A activity in the packaging industry with more private equity companies investing in the sector. The frenzy of deals has affected all segments including metal, plastics, glass, cartonboard and flexibles.
Chris Rawstron, partner and head of corporate and commercial at Irwin Mitchell, said: “The manufacturing sector had a strong first six months for M&A and it looks like the second half of the year will be even stronger.
“In Q2 there was an increase in the number of private equity-backed manufacturing deals and this continued in the last three months with almost 20% of transactions being funded via private equity. Although I don’t expect to see investment levels by the end of 2014 to be as high as in the last few years, there are clear signs that more and more private equity is moving into the sector again.”
Nationally in the first quarter of 2014, the proportion of deals which were backed by private equity stood at 15.3%, but this increased to 16% in Q2. In the most recent quarter the percentage level was 19.9%, which takes the average for the year so far to 17.2%.
The South East strengthened its dominant position as the region where the most manufacturing deals were completed. This was followed by the North West, the West Midlands and then Yorkshire. The East Midlands witnessed the biggest rise in the share of activity, moving from 7.1% on Q2 to 12.8% in Q3.