Yorkshire manufacturing firms 'highly attractive' to overseas bidders, Irwin Mitchell research finds

But one of the key findings is the involvement of foreign bidders in more than one-quarter of prospective Yorkshire deals.

M&A activity in Yorkshire fell by 10 per cent last year but the region’s manufacturers are outperforming those based in the North West when it comes to attracting venture capital.

Irwin Mitchell’s analysis found that 126 Yorkshire manufacturing businesses were the target of M&A activity in 2022.

This compares to 140 deals in 2021 and 132 in 2020.

According to Irwin Mitchell, deal volumes in the sector in 2022 are at the lowest level in the last five years with the average activity level between 2018 and 2021 standing at 138.

In 2022, most manufacturing related transactions (52 per cent) were categorised as acquisitions whilst less than two per cent of deals were restructuring transactions compared to 11 per cent in 2020.

According to Irwin Mitchell, overseas bidders continue to have a big impact on UK M&A in the manufacturing sector.

Last year 27 per cent of deals with a Yorkshire-based target business involved an overseas bidder with the US being the most active, accounting for seven per cent of the cross-border deals into the region.

Venture capital played a big part in manufacturing related deals in 2022 with 303 (22.6 per cent) of transactions being backed in this way.

Yorkshire accounted for 35 venture capital backed manufacturing deals which was 27 per cent of all regional sector deals. The figure was much higher than in the North West where only 10 (12 per cent) of the deals were backed in this way.

Over a third of deals (36 per cent) of deals in London in the were VC backed whilst in the West Midlands, the figure was just 10 per cent.

Gavin Maddison, corporate partner at Irwin Mitchell, said: “This latest analysis paints a mixed picture for manufacturing deals in Yorkshire.

"On one hand the number of transactions has fallen and is at the lowest point for five years, whilst on the other the region’s manufacturers are attracting far more interest from venture capital backers than businesses in the North West and West Midlands.

“In addition to the strong appetite within the region amongst private equity, it’s also clear that Yorkshire manufacturers continue to be highly attractive to overseas bidders.”