Manufacturing and Industrial M&A Predictions

Rising tide

Manufacturing and industrial M&A activity expected to grow supported by continued business confidence and private equity activity

In Autumn 2014 M&A leaders gave their views on the current economic environment, deal drivers, valuations and key themes of successful deals. Companies surveyed have a combined market cap of nearly £200bn.

Manufacturing and industrial M&A activity expected to grow

Over nine in ten UK-listed manufacturing and industrial companies now describe themselves as acquisitive, with 56% describing themselves as very acquisitive

In the United Kingdom, Deloitte’s Manufacturing and Industrials M&A Predictions reflect companies’ expectations that this trend will continue into 2015. With continued positive sentiment in the sector, the majority of industry M&A leaders expect an increase of deal activity in the next 12 months (56%), with no respondents expecting a decrease.

A prediction of M&A trends in the sector

Appetite for M&A in all sectors appears robust at a global level. As Deloitte’s recent M&A Index revealed, more than $2.5 trillion worth of M&A deals globally have been announced so far in 2014, a 30% increase on $1.9 trillion for the whole of 2013. This is set to make 2014 the best year for M&A deals by value since 2007.

Key highlights of the predictions include:

  • 94% of industry leaders now describe themselves as acquisitive
  • Acquisition focus shifts from emerging to more traditional markets and private equity owned targets
  • 87% of M&A leaders expect deal multiples to remain consistent or increase in 2015.

“The last six months has shown signs of returning to a more stable M&A environment, particularly in the UK; with strong debt markets, robust activity levels across most industrial sub-sectors and good levels of confidence among industry participants. As we move into 2015, we believe that this positive sentiment is likely to continue, with the pipeline of deals looking strong, albeit with some caution expressed as a result of international macro-economic risks.”
Ross James, UK corporate finance manufacturing industry leader at Deloitte

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