The Berg M&A Barometer, complied by law firm Berg, shows that for deals in the £2 million to £10 million bracket, the North West contributed 29 transactions worth £130 million during 2011. The region now accounts for 14 per cent of lower mid-market M&A activity, up from 9 per cent the previous year.

While London leads the way with 87 deals (43 per cent of the market), deal values in the bracket fell by £86 million from 2010 to £418 million during 2011.

The West Midlands has become the third most active region, jumping above Yorkshire, and accounting for £89 million from 19 transactions.

Stephen Foster, partner and head of corporate at Berg, comments, ‘Despite the fall in transactions within the £2 million to £10 million bracket, the North West capitalised on London’s drop in deal market share and consolidated its position as the most active region for lower mid-market activity.’

Berg says that although the economic woes in Europe and the wider financial sector continue, the appetite to export and take advantage of demand from emerging markets has bolstered manufacturing.

Overall, transactions in the bracket fell from 249 to 203 between 2010 and 2011. According to Berg the lower mid-market is a representative barometer for investor sentiment among the UK regions.

Berg adds, ‘With the North West and West Midlands being the UK’s manufacturing hubs, but also major professional services centres, it is no surprise that they are now the leading driver for M&A activity outside London.’