Roger Buckley
Partner, M&A
2025 review
The Manufacturing & Engineering industry saw encouraging levels of deal flow in 2025, despite uncertain market conditions.
We advised on some 60 deals across the Industrials market throughout the year, including a wide range of sectors from engineering to packaging, and infrastructure services to pet food manufacturing.
The sector has shown remarkable resilience in the face of rising costs, labour shortages, tariffs and other geopolitical tensions. Increasing costs for minimum wage and the proposed employment law changes have caused muted business confidence, reduced recruitment intentions and dampened immediate growth prospects.
Despite these headwinds, M&A appetite remained strong in 2025 - PE ‘dry powder’ and overseas corporates continued to be attracted to the UK. Corporate carve-outs have been a strong feature in the deals landscape as PLCs focus portfolios and increase shareholder value. For example, we advised Hill & Smith on a suite of international carve-outs and the sale of Parking Facilities to Stretton Investments, creating a more streamlined business. We have also seen a convergence in valuation expectations between buyers and sellers.
Innovation, industrial automation and sustainability continue to rank highly in M&A considerations and featured across many of our deals.
Innovation
The economic and regulatory environment has sharpened the need to adapt, innovate and create. This has been particularly relevant in the packaging sector where heightened new product activity has driven M&A appetite as businesses reposition to meet consumer and regulatory expectations.
The sale of Colpac to Sabert Corporation was a key deal in 2025 with Colpac representing an excellent opportunity to bring the design capability and manufacturing innovation for sustainable packaging solutions into the Sabert group. We also advised on the sale of award-winning Clifton Packaging to PE-backed Cartonpack Group.
Industrial Automation
Industrial automation addresses key issues in manufacturing, including labour shortages, ageing skilled workers, supply chain security and the fundamental need to manage price inflation and to protect margins. There’s rising interest in automation across the sector and acquirers are building capability to meet demand.
The high-profile JLR incident in 2025 brought the threat of cyber-attacks firmly into the spotlight, revealing a high level of vulnerability amongst manufacturers with IoT technology. We advised on around ten deals in cyber security in 2025, a good number of these serving manufacturers. For example, Aspire Technology Solutions, a UK-leading provider of managed IT, cyber security and modern workplace solutions, agreed a new round of investment from LDC to accelerate the company’s expansion and support an ambitious acquisition strategy.
Sustainability
Sustainability has become integral to every deal we see. It is a theme that touches all segments of the industry and acquisitions are playing a key role in positioning businesses for the future.
We advised the shareholders of GenAir on their sale to STAR Capital. GenAir is the UK's largest specialist compressed air system rental company, and 90% of customers come from recurring repair and maintenance activities at manufacturing and industrial sites, maintaining utilities and transport infrastructure.
We also advised Genuit Group on the acquisition of Monodraught, a “pioneer of British Greentech”, committed to minimising the carbon footprint of every building with a range of sustainable ventilation and cooling products, and Hometree on its acquisition of GreenGenUK and GreenGenS&R — designers and installers of air source heat pumps, solar PV, battery storage and solar thermal solutions.
2026 outlook
Despite the challenges, we expect another active year of M&A. We are seeing a wide range of buyers and sellers poised to make moves in the Manufacturing & Engineering sector, with notable interest from OMBs looking to exit and corporates considering strategic carve-outs.
Industrial automation, compliance, testing and cyber-security are likely to remain key areas for investment. The Q4-25 Make UK / BDO Manufacturing Outlook report includes practical steps manufacturers can take to build cyber resilience. Energy costs — which remain one of the top issues for manufacturers — will keep sustainability high on the agenda, as will the increasing emphasis on renewables.
Digital transformation and the application of AI and augmented reality within businesses will also be important, as will the restructuring of supply chains and management of macroeconomic factors like regulation, labour availability and cost.
From a European perspective, we expect the Defence sector will continue to be a bright spot as Europe rearms at the fastest pace since the end of the Cold War. According to McKinsey, European defence spending will increase by a cumulative €700-800bn between 2022 and 2028 as governments seek to boost an under-weight EU supply chain.
There is also a strong cohort of overseas investors who are keen to deploy capital in the UK. In 2025 we advised on the sale of Wescom Group, a leader in critical safety and survival solutions to US investment firm Albion River, and the acquisition of D2E, an engineering consultancy by VDA, a US firm backed by Keystone Capital Partners. Both deals demonstrate the UK’s ability to attract US buyers and the continued appetite of US PE-backed businesses for exciting and dynamic companies.
Private equity was involved in around half of our industrials deals in 2025, and we expect to see interest continue, with many attracted by the vast opportunities in advanced manufacturing and the appetite of business owners to exit, de-risk or seek growth.
Alongside our optimism for deal flow in the sector, levels of scrutiny on deal processes are at an all-time high. Thorough preparation and a well-reviewed package of due diligence is increasingly important to ensure a successful transaction.
Related insights
Key Contacts
View bio