UK manufacturing M&A activity grew by 11% in 2024, rebounding to levels last recorded in 2022, despite the continued pressure of rising costs, labour shortages and geopolitical tensions, according to accountancy and business advisory firm BDO. BDO’s Manufacturing Deals Review reveals that 782 UK manufacturing deals were completed in 2024, up from 707 deals reported in 2023. Despite this buoyancy, the sector is not without its challenges as businesses look to implement the rises to employer’s NI costs and minimum wage levels and prepare for the proposed employment law changes. Analysis shows that deal activity slowed somewhat in the first half of 2024 but gained momentum following the Autumn Budget with 475 deals completed in the latter six months. Additionally the findings show an urgency for deal completions in view of anticipated changes to Capital Gains Tax and Business Asset Disposal Relief. Furthermore there was an increasing interest from entrepreneurs considering exit both of their ownership and the UK. Businesses in the engineering services subsector were the most prolific deal doers seeing a 26% increase in activity and representing almost a third (32%) of all completed transactions for the year. This was followed by businesses in the packaging & materials sector which saw deal volumes increased by almost a fifth (18%), and accounting for 11% of all completed transactions. Separate research from BDO and Make UK reveals that over a quarter (26%) of UK manufacturing business are considering a sale of all or part of their business within the next two years. This increases to over a third (35%) across the next three to five years, suggesting a positive shift in M&A sentiment as many business leaders look to implement their strategies. Roger Buckley, UK Industrials M&A Partner at BDO, said: “Last year proved to be a busy year for manufacturing deals but upcoming policy changes are now weighing heavily on business confidence, recruitment plans and growth intentions. Many businesses will be hoping for a boost in sentiment when the Industrial Strategy is announced later this year. “Looking ahead we expect to see a solid year of M&A activity. Valuations are holding firm and there remains a large cohort of cash-rich investors who believe in the long-term prospects and broad opportunities for growth within the sector. These businesses now need government to offer incentives that will support their investment in new technologies and onshoring or reshoring operations.”

A leading manufacturing firm based in Leicester has announced that they have permanently moved to a four day-working week, without any reduction in pay for staff. At Camloc Motion Control, the companies’ 35 employees have all had their working hours reduced to a four-day, 35 hour working week with no reduction in pay, proving that being a ‘traditional’ manufacturer isn’t a barrier when it comes to implementation. The company has been accredited as a Silver Standard four-day week employer under the 4 Day Week Foundation’s Employer Accreditation Scheme that officially recognises permanent four-day week employers in the UK. Camloc Motion Control is a UK-based designer and manufacturer of gas springs, struts, and dampers. They have been manufacturing motion control solutions for over 35 years. Since the Covid pandemic, the four-day week has become more and more popular and is now being trialled and implemented across the world. Numerous studies have shown that moving to a four-day week boosts productivity and workers’ wellbeing. When Microsoft trialled a four-day week with no loss of pay in their Japan office, productivity went up by 40%. In January, the 4 Day Week Foundation announced that over 220 companies in the UK, which includes over 5,000 workers, have permanently adopted a reduced hours four-day week with no loss of pay for employees, with the vast majority reducing working hours to 32 hours a week or less. Digital challenger bank, Atom Bank, are one of the biggest four-day week employers in the UK with over 500 staff. Matt Warne, Managing Director of Camloc Motion Control, said: “As a manufacturing company committed to customer service, quality and continuous improvement, we believe the transition to a four-day working week will benefit both the well-being of our team and the long-term performance of our business. “By allowing our team more time to rest and recharge, we’re creating a working environment that promotes focus, creativity and job satisfaction – all the elements essential in delivering the high standards of customer service we strive for. “Studies demonstrate that a well-rested workforce is more productive, engaged and innovative, aligning perfectly with our ethos and core values. “This move reflects our commitment to optimising our operations and the lives of those who make our success possible, whilst ensuring we continue to deliver the high levels of product quality and customer service we demand of ourselves.”

Davenham Switchgear, a brand of Legrand and a supplier of low-voltage (LV) switchgear to the hyperscale data centre market, has chosen Nottingham as the home of its new global manufacturing site. With over 40 years of expertise built at its Dublin headquarters, where around 350 staff are based, Davenham has established itself as a major player in powering hyperscale data centres worldwide. The company’s expansion into the UK marks a significant step in supporting the growing demands of global tech giants. The new 100,000ft² facility at Fairham Business Park, secured in a deal facilitated by FHP Property Consultants, on behalf of global real estate investment manager, Hines, will manufacture cutting-edge LV switchgear for the world’s largest data centre operators. This technology plays a crucial role in supporting AI and cloud computing ambitions. Nottingham was chosen for its excellent transport links, strong local labour market, and the availability of a high-quality facility, making it the ideal location for Davenham’s next phase of growth. The move will also create over 100 jobs, further strengthening the region’s advanced manufacturing sector. Chief Executive Officer at Davenham Switchgear, Tom Nicholson, said: “We’re excited to bring Davenham Switchgear to Nottingham, with our new site opening later this year. Nottingham’s strong transport links, academic talent, and innovative business community make it the ideal location for us to expand our manufacturing capabilities. “With our established reputation in Ireland for delivering cutting-edge solutions, we’re looking forward to joining the thriving business scene in Nottingham and the wider Midlands region. “If you’d like to be a part of the team, and play an essential role in driving forward a modern, digital economy of the future, we’d love to hear from you.” Securing the deal, Tim Gilbertson, equity director of FHP Property Consultants, added: “The letting of over 100,000ft² in Nottingham’s foremost business location, Fairham Business Park, is a real boost for Nottingham and, indeed, the wider region. “I am delighted that we managed to secure Davenham Switchgear as an occupier, on behalf of our clients, Hines, as it will bring jobs and investment to the region and complement the strong occupier line-up already at the business park. “For all parties, this is a great deal and with other space under offer at Fairham Business Park, I look forward to bringing news of further transactions soon.” Mickey Scott, director at Hines, added: “I am thrilled to have completed the deal with Davenham Switchgear, adding another notable occupier to our line up at Fairham Business Park. Having two of our three units at Fairham now let, and the other under offer, is testament to the quality of the buildings and location. “We look forward to seeing more activity in 2025 at our remaining available sites in the East Midlands, Dove Valley Park and East Midlands Distribution Centre.” Talking about the impact on the city, Megan Powell-Vreeswijk, Chief Executive Officer at Marketing Nottingham & Nottinghamshire, said: “It’s fantastic that our Invest in Nottingham team have been able to support Davenham Switchgear’s expansion into the area, bringing new jobs and investment to the region. “Seeing a global company, which is a specialist in its field, choose Nottingham as a base demonstrates once again the strong offer we have here.”