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UK manufacturing is a buoyant buyer
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11/09/2008
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Economic downturn or no, UK manufacturers are busier than ever growing their business by merging with and buying their rivals.
According to a new report published today (11 September), merger and acquisition activity in the sector has shown remarkable resilience in the first half of 2008 with 103 deals announced worth a combined value of £7.38 billion.
The study by accountants and business advisers PKF - Deal Drivers UK - showed that in the first half of 2008, the number and value of deals compared favourably with the 112 transactions worth £10.81 billion concluded in the first half of 2007 and massively surpassed the 84 deals worth £2.64 billion announced in the second half of 2007.
The authors say the sector has quickly recovered from the effects of the credit crunch, which is exemplified by three £1 billion-plus UK manufacturing transactions announced in the latest period.
However, PKF somewhat strangely lists the private equity buyout of a waste management company as the largest of the ‘manufacturing’ sector deals - the £1.6 billion buyout of Biffa, by a consortium including Montagu Private Equity, Global Infrastructure Partners and UCIL.
In second place was the £1.3 billion acquisition of UK food and drink beverage equipment manufacturer Enodis by Manitowoc, the US-based industrial equipment and machinery group.
There was been a healthy appetite for mid-market manufacturing deals, says PKF, with 59 deals worth £1.94bn coming to the market. But deals among larger players also flourished with five of over £500 million being announced despite the tricky market conditions.
Malcolm Cook (pictured), corporate finance partner at PKF, said he expected to see further significant deals in the short-term, such as the possible sales of the pre-press and print company Wydeham Group and also that of RPC Group, the listed manufacturer of rigid plastic packaging.
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Author
Ken Hurst
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