• Swindon & Wiltshire Manufacturing
• Tuesday January 6 2026

South West manufacturers prepare for new wave of M&A deals in 2026

South West manufacturers are preparing to bring their businesses to market in 2026, as well as making fresh investment in digital and automation capabilities, according to a new report by specialist business advisory firm FRP.

Of the South West manufacturing senior decision makers polled for FRP’s new report The Manufacturing Agenda, nearly two in five (38 per cent) said they expect their boards to be leading sell-side M&A over the next 12 months.

Boards will also be prioritising managing cashflow or working capital pressure (36 per cent) and sustainability, ESG compliance or decarbonisation efforts (35 per cent).

This follows a year where they have been focused on managing supply chain disruption (31 per cent), margin squeezes and unplanned cost spikes (27 per cent) and ESG regulation (25 per cent).

To bolster their operations, South West manufacturers are planning fresh investments for the year ahead, focussing on those that boost their digital or automation capabilities (49 per cent), address skill and talent needs (48 per cent) and support buy-side M&A (47 per cent).

Lenders and investors share many of the same 2026 focus areas as boards. When asked what would prompt them to intervene in a portfolio company over the next 12 months, lenders and investors cited cost, cashflow and working capital (44 per cent), investment, automation and digital execution (41 per cent) and leadership resilience (37 per cent).

Matt Whitchurch, financial advisory partner at FRP in Bristol, said: “The focus on major strategic steps, such as joining together with other firms through sell-side M&A, reflects the fact that manufacturing resilience is no longer purely defined by financial strength – it’s about anticipating and addressing capability gaps.

“Many South West manufacturers will be seeking new funding to support their strategies and investment ambitions, and it’s encouraging to see broad alignment between board and lender priorities.

“Boards that understand that lenders are firmly focused on operational fundamentals like cashflow, and that have the right advisory support in place, will be in the best position to build compelling cases for new or further investment.”