Market insight – The manufacturing sector
Acquirer appetite for high-quality UK manufacturing companies remains strong – yet buyers are becoming increasingly selective about the businesses they pursue.
Leading data bureau Experian reported 986 manufacturing M&A deals were completed in the UK and Ireland during 2025, reflecting sustained interest in the sector’s long-term growth fundamentals.
Regionally, in the South West of England, manufacturing deal value in 2025 nearly quadrupled, and in Yorkshire & Humber increased almost five times on the 2024 total.
Deal volume, however, is now secondary to strategic fit, resilience and long-term value creation. For business owners considering an exit, understanding this evolving landscape is key to achieving a successful outcome.
A more discerning market
When deploying capital, business buyers are prioritising companies with clear competitive advantages, strong financial performance and defensible market positions.
Businesses which can demonstrate clear differentiation from their competitors — whether through intellectual property, specialist expertise or embedded customer relationships — are best positioned to stand out.
Consistency and visibility of earnings is also critically important. Businesses with strong forward order books, recurring revenue streams and predictable margins are significantly more attractive than those with volatile or uncertain performance.
Policy and investment tailwinds
Government focus on industrial growth is also influencing deal activity. An increased emphasis on advanced manufacturing, innovation and long-term investment is helping to create a more supportive environment for transactions.
This is encouraging both domestic and international buyers to invest in UK manufacturing businesses that align with long-term strategic priorities, particularly those demonstrating scalability and future growth potential.
Technology and operational capability
Digital transformation continues to play a growing role in M&A decision-making. Buyers are increasingly assessing not only financial performance, but also operational maturity.
Businesses that have invested in automation, data systems and efficient processes are often viewed as lower risk and easier to scale post-acquisition. Conversely, companies with outdated systems or limited visibility over operations may face greater scrutiny during due diligence.
Cost pressures and margin resilience
Ongoing cost pressures — particularly around energy, labour, and supply chains — remain a key consideration. These factors are shaping both buyer appetite and valuation.
However, they are also creating opportunities. Businesses that have successfully managed cost inflation, improved efficiency or protected margins are seen as more resilient and therefore more attractive acquisition targets.
Nevertheless, sustained pressure in some areas of the market is likely to drive consolidation and strategic acquisitions, particularly where buyers can unlock efficiencies or synergies.
Financing and buyer behaviour
Access to capital remains more disciplined than previously, which is reinforcing a focus on high-conviction deals where the strategic rationale is clear and the return on investment well defined.
Private equity and strategic buyers remain active, often pursuing buy-and-build strategies to scale platforms and enhance value through consolidation.
Supply chain and strategic positioning
Supply chain resilience has become a long-term strategic priority. Buyers are increasingly interested in businesses that play a critical role within supply chains, offer reliable domestic capability or reduce dependency on overseas sourcing.
This has elevated the attractiveness of manufacturers that can demonstrate stability, reliability and strategic importance within their respective ecosystems.
What EBITDA multiples are being achieved for sale transactions?
Valuations vary significantly depending on size, quality and growth profile, but recent transactions provide a useful benchmark.
Typical EBITDA multiples in UK manufacturing transactions
- Median EV/EBITDA: ~5.3× for UK mid-market industrial and manufacturing businesses
- Typical range: 4× – 7× EBITDA for many privately owned SME manufacturers
- Higher-quality or larger companies: 7× – 10×+ EBITDA, particularly where there is strong growth, specialist capabilities or international scale
Impact of company size on multiples
- ~£200k EBITDA: ~3.1×
- ~£500k EBITDA: ~4.1×
- ~£1m EBITDA: ~5.1×
- ~£5m EBITDA: ~7.1×
- ~£10m EBITDA: ~8.5×
Rule of thumb for UK manufacturing sales
- 3×–4×: Smaller or higher-risk businesses
- 4×–6×: Typical owner-managed manufacturers
- 6×–8×: Strong, well-performing businesses
- 8×–10×+: Premium strategic acquisitions
What drives higher valuations in UK manufacturing M&A?
In today’s more selective market, buyers are placing greater emphasis on specific value drivers that can justify stronger pricing and higher EBITDA multiples. Key factors include:
- Scale and EBITDA size: Larger, more established businesses typically command higher multiples due to perceived stability and lower risk.
- Customer diversification: A broad and balanced customer base reduces reliance on individual clients and enhances earnings security.
- Recurring or contracted revenue: Long-term contracts, framework agreements or repeat business provide visibility over future income and improve buyer confidence.
- Strength and depth of management: An experienced management team that can operate independently of the owner is highly attractive and supports smoother post-sale transitions.
- International reach and export capability: Access to global markets and diversified revenue streams strengthens growth prospects and reduces domestic market reliance.
- Clear growth opportunities: Well-defined pathways for expansion — whether through new markets, product development or acquisition — can significantly enhance perceived value.
- Exposure to high-growth end markets: Businesses aligned with expanding or strategically important markets often benefit from increased buyer demand and competitive tension.
Which manufacturing businesses have been sold by KBS Corporate?
The following is a selection of deals in this sector which we have advised on in 2026 and H2 2025:
Clingbrook sold to Walker Rubber
We facilitated the retirement of the owners of Essex-based rubber mouldings manufacturer Clingbrook with the company’s sale to one of Europe’s most trusted rubber specialists.
Enrogen, a well-established Yorkshire-based manufacturer of diesel generators, was sold to a private equity-backed Italian company seeking to increase its UK presence.
C & F Millier sold to Corvero Group
C & F Millier, a Bristol-based manufacturer of high-precision components for the aviation industry, was sold to Corvero Group, part of the Ansor LLP investment portfolio.
Flowfit sold to Axel Johnson International
Flowfit, a Shropshire-based leading distributor and manufacturer of hydraulic components and systems, was sold to Axel Johnson International’s business group Driveline Solutions.
Tolbest sold to PHD Industrial Holdings
Tolbest, a Warrington-based leading manufacturer and supplier of industrial dyes, was sold to investment firm PHD Industrial Holdings – also the acquirer of BIL Group through KBS.
What this means for business owners considering an exit
The current M&A environment presents a clear message: quality drives outcomes.
Well-positioned manufacturing businesses — those with strong performance, clear differentiation and operational robustness — continue to attract significant interest and achieve competitive valuations.
However, the margin for error has narrowed. Buyers are more forensic in their approach and preparation has become increasingly important in maximising value.
For owners, this makes early planning and expert advice essential. Understanding how your business is perceived in the current market, and how it aligns with buyer priorities, can make a material difference to both timing and outcome.
If you are a shareholder of a UK manufacturing company, we would be keen to speak with you regarding your potential exit or succession plans. If you are open to exploring this avenue or have any questions, please do not hesitate to call us on 0161 222 0072.