High optimism in manufacturing as booming sector aligns for further growth

04 April 2022

Despite the considerable challenges facing the manufacturing sector such as rising input prices, supply chain disruption and shortages of key components, deal activity remained strong last year as investors sought to back companies with the most promising innovations and the strongest growth potential. M&A transactions involving UK manufacturers jumped by almost a third in 2021, with dealmaking surpassing pre-pandemic levels.

In our latest review, we examine the deal activity levels across the UK manufacturing sector and identify the subsectors experiencing the highest volumes. We also explore appetite from private equity and overseas acquirers of manufacturing targets and show how listed businesses in the sector are outperforming the market as a whole.

Set against a backdrop of skills shortages and wage inflation, we saw particularly strong interest in Industrial Automation, and we expect the high demand for investment in this sector to continue to fuel M&A activity. With the drive to Net Zero coming into sharper focus, we are also likely to see increased interest in innovation that can accelerate the commercialisation of low-carbon technologies, systems and business models. We are also seeing M&A activity influenced by a desire to improve supply chain resilience.

Download our latest Manufacturing Deal Review to read more about the key M&A trends and our predictions for the coming year.

Download the deal review