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UK manufacturers are continuing to progress M&A strategies, despite a volatile macroeconomic landscape, as BDO research shows there were 793 transactions involving a UK manufacturer in 2022 compared with 779 the previous year.
The levels of deal activity is particularly notable given the market headwinds as private equity maintained strong interest in the market, with buy-outs accounting for one in five deals. This reflects both resilience and optimism in the UK manufacturing sector.
In addition, there was a substantial increase in manufactured materials, which saw its share of deal activity increase from 9% to 13%.
Meanwhile the share of deals in food and drink declined from 13% in 2021 to 10% in 2022, while building products and life sciences remained among the top five sectors with the highest deals activity.
However, proportions of deals across sub-sectors remained unchanged from 2021, with engineering services accounting for the largest portion.
Roger Buckley, UK industrials M&A partner at BDO, said: “The UK manufacturing M&A market has been surprisingly resilient despite considerable headwinds. Investors, corporates and entrepreneurs are still active, making the most of strategic M&A opportunities to safeguard the future and position for growth.
“There is high scrutiny by investors across the board, but we see plenty of opportunities in the M&A mid-market, attracting high levels of interest, investment and value, particularly where there is a technology or sustainability play adding value.”
He added: “M&A strategies aligned with the major market themes of the moment can be a key driver to help businesses position for the future, access funding, attain greater resilience and competitive advantage.”
