n Industries: Building a specialised industrial group through acquisitions

n Industries is a consolidator operating in the UK industrial sector, focusing on acquisitions of high-quality, niche, highly-specialised small and medium-sized businesses with strong management teams.

The company was formed in 2023 by Jonathan Bates-Kawachi, who now leads the company alongside senior founding partners Duncan Penny and Paul Simmons.

In October 2024, n Industries secured funding to move forward with its M&A growth strategy in an oversubscribed funding round led by Antheia, the family office of Spotify founder Daniel Ek, alongside other investors including Sun Mountain Partners.

Following the funding round, the company appointed Reema Harfoushi as its first Director of Mergers and Acquisitions to support its strategic growth plan.

Since then, n Industries has wasted little time in executing its M&A strategy, completing three acquisitions already so far in 2025 – adding businesses across several sub-sectors of the industrial market.

The company’s success so far has been built on a combination of industry tailwinds, management expertise (both in M&A and within the industrial sector), a well-defined M&A strategy and a decentralised, collaborative, flexible management model that is responsive to the needs of individual owners.

This month, BSR spoke with n Industries CEO Jonathan Bates-Kawachi, discussing the company’s story and its approach to acquisitions, along with topics including the state of M&A in the UK industrials sector and n Industries’ plans for the future.

The acquisitions so far
The three deals completed by n Industries so far in 2025 demonstrate not just the speed and efficiency with which the firm operates, but also the diversity of the industrial companies they are targeting and the flexibility of their M&A strategy.

n Industries completed its first acquisition in February, with a deal for a majority stake in friction materials manufacturer Friction Technology Limited. Caernarfon-based Friction Technology develops and supplies mission critical friction materials globally to Original Equipment Manufacturers (OEMs) and after-market customers across sectors including wind energy and commercial vehicles.

In late March, n Industries completed its second deal, acquiring Nottingham-based safety critical insulation components manufacturer Termate Limited. The long-running business designs and manufactures a wide range of own-brand electrical components that are used for an array of applications, including in data centres and battery/energy storage.

Just a few days later, in early April, n Industries completed what is – at the time of writing – its most recent acquisition, with a deal for Industrial Clutch Parts Limited (ICP), a leading supplier of mission and safety critical industrial brakes, clutches, friction materials and couplings.

ICP serves as a specialist distributor for a number of major industrial brake and clutch brands, including Danfoss Airflex and WPT, as well as having a significant portfolio of own-brand products and aftermarket parts. The company supplies a diverse range of markets, including metal pressing, medical, wind energy and process industries.

The n Industries acquisition profile
When discussing M&A-first growth strategies in the past, we’ve heavily emphasised the importance of developing strong acquisition criteria before setting out on the M&A trail. Not only does this provide an M&A plan with a well-defined strategic direction and ethos, it also ensures that time is not wasted pursuing deals that are not suited to the plan.

Of course, having too strict a profile – or sticking too rigorously to all the criteria without incorporating even a slight degree of flexibility – can also be damaging and mean that valuable opportunities are missed simply because they do not tally up precisely with every single checkpoint.

For any company considering an acquisitive growth plan, n Industries’ acquisition criteria offers a strong example of how to balance specificity with flexibility, in order to encompass both strong strategic direction and a diverse range of opportunities.

The company targets industrial SMEs with revenue ranging from £2 million to £15 million, with a niche or specialised market position in their industry vertical, relatively inelastic customer demand and a low risk of disruption, a diversified customer base, a high level of repeat or recurring revenue and/or predictable-defensible business and opportunities for the business to grow above GDP.

Peeling back the layers of these criteria reveal the thought that has gone into developing this acquisition profile. For example, n Industries suggests that a strong market position is highlighted by strong underlying profitability and operating profit margins of above 10 per cent, while defensible business is defined by not relying on a high-level of one-off project business.

This preparedness and thoroughness extends through the company’s acquisition process itself, helping to explain why the group has been able to successfully close multiple acquisitions within such a short timeframe.

When asked how n Industries had been able to complete three deals so close to one another, Jonathan Bates-Kawachi credited the “combination of experience, preparedness and being collaborative.”

He continued: "We have an experienced team that has done 30+ acquisitions over their careers, have financing in place from our investors and are very well prepared in terms of what information we need to receive in terms of completing our due diligence and putting the legal documents in place. We also try and take a collaborative approach with the owners in terms of facilitating a time and cost-effective transaction.”

In terms of how the group structures its deals, Jonathan revealed that they are typically structured through a combination of an upfront cash consideration, alongside deferred considerations.

The leadership structure
n Industries’ leadership team brings a wealth of experience both in the industrial sector and in M&A-led growth. CEO Jonathan Bates-Kawachi has extensive experience in the industrial sector, having previously a senior investment manager at Pictet Asset Management, as well as a strong track record of investing in SMEs.

Senior founding partner Duncan Penny served as CEO of XP Power from 2003-2020, helping to build the firm to over £1 billion in market cap and £300 million in revenue while completing a number of acquisitions.

Penny’s fellow senior founding partner Paul Simmons was previously CEO of Hill & Smith and CEO of the Safety Sector at Halma and has a strong, extensive track record of both acquisitive growth at decentralised industrial businesses, as well as double-digit organic growth.

Like Simmons, M&A director Reema Harfoushi – who joined n Industries following its fundraising – is also a former employee of Halma plc, serving as the firm’s M&A Manager from 2019 to 2024. Harfoushi also has extensive experience in the oil and gas industry, having spent more than ten years working on major capital projects with industry giants including Shell, Chevron and Eni.

Discussing the depth of experience in n Industries’ management team, Jonathan Bates-Kawachi stated that Duncan Penny and Paul Simmons had “played a key role in enabling us to bring onboard investment” and in establishing “the culture and structures in the group that can benefit all the operating companies that join.”

In terms of acquisitions, Jonathan says that Duncan and Paul’s experience and reputation are vital in discussions with potential sellers and in the growth strategies of companies within the group.

“We find the proposition of Paul or Duncan’s involvement as advisors resonates well with business owners and, in terms of the businesses that have already joined the group, there is genuine excitement about what can be achieved together.”

Offering to owners
The key for any consolidator seeking to grow through acquisitions in niche industries is the offering they can present to owners. Unless a buyer is targeting distressed acquisitions, which n Industries does not, then they need to be prepared to put a compelling case to owners that their interests would be best served by selling to them.

Reflecting this, n Industries have made their offering to owners an absolutely central element of their acquisition model, enabling them to appeal to a range of vendors across the industrial sector and respond flexibly to their needs in order to facilitate deals.

Describing the kinds of owners that n Industries typically deals with, Jonathan Bates-Kawachi groups them into two basic categories.

“Owners who are interested in selling to n Industries are either interested in an outright retirement/exit or often, as in the case of the Industrial Clutch Parts and Friction Technology businesses that joined our group, we find owners that are looking for an engaged partner that can work with them within our decentralised model, as well as invest resources, to help the business further prosper over the long-term.”

This may sound simple, but it responds directly to two of the key challenges facing owners in the industrial sector: succession issues and investment in long-term growth. Naturally, these aren’t issues exclusive to the sector, but they are currently perhaps the two most pressing considerations for owners within the industrial market.

The succession issue
Succession is something that owners across the UK are finding challenging, particularly in sectors – like industrial – in which the population of owners is ageing and looking towards retirement.

For retiring owners, as well as younger sellers who are simply looking to exit their business, the propositions offered by many current buyers could threaten the legacy they have created and potentially radically transform the business and its ethos post-sale, putting jobs, the brand and the company’s reputation with customers and clients at risk.

Even for owners looking to stay involved but gain investment, these concerns are prevalent. A sale to a private equity firm, for example, may result in them ceding control over the strategic direction of the business, while the focus on preparing the business for another future sale can create disruption. A sale to an industry rival, meanwhile, could see the business absorbed or radically restructured.

As Jonathan explains: “Finding the right buyer is a challenge for many owners. They are often faced with a choice of selling to a trade buyer who might choose to merge the business with a larger entity, meaning the closure of the site and disruption for employees or selling to a financial buyer that might look to flip the business for a higher price in 5-7 years or load the business with too much debt.”

Long-term ownership is a key part of the group’s offering. Whereas buyers like private equity firms will be seeking to dispose of acquisitions after a few years (raising questions about what is being sacrificed in the pursuit of short-term value creation), n Industries define themselves as permanent owners, focusing on building over time, not saddling them with debt and not instituting sudden, disruptive changes.

“We have a permanent ownership model, which means when a business joins the group we plan to never sell. We keep the brand and the location, and look to build on the existing success of the business by working with the management team and employees of the business by taking a truly long-term perspective.”

Flexible ownership
Ultimately, the key to n Industries’ approach is perhaps the flexibility they offer. For owners seeking to exit fully, the group can take over the full company as soon as the deal closes. This means owners are not pressured to stick around and can leave relatively quickly once a suitable handover has been completed, with the group offering a strong succession plan to preserve the business’ legacy.

For owners seeking to remain in place, meanwhile, n Industries provides financial, operational and strategic support, while enabling owners and management teams to retain a stake of up to (or above) 25 per cent.

This openness to the continued involvement of existing leadership structures is also embedded in n Industries’ decentralised structure, in which the autonomy of management teams is maintained post-sale, along with the target company’s brand, team and facilities.

Following a takeover, n Industries provides capital to enhance the value of acquired businesses, whether through organic growth initiatives or M&A activity, with an incentive scheme that enables management to share in this growth.

This combination of growth capital, managerial support and operational autonomy enables owners to continue guiding their own businesses and retain their identity while benefitting from the vast wealth of experience within the n Industries leadership team and the capital required to invest in growth in whatever way they see fit.

Discussing the importance of this flexibility, Jonathan states: “Some business sales will be a retirement/exit sale where the owner is looking to step away as soon as possible. In these cases, we can buy 100% of the business on day one.”

“In others, it can be an attractive option for business owners to take some money off the table, retain some equity and work with a partner like n Industries – who will work with them to further grow their business, including through adding additional resources, before the existing owners complete a full exit further down the line enabling them to realise further value.”

Decentralised management
Targeting deals across the UK, while enabling businesses to retain operational autonomy means that n Industries operates with a decentralised management model. This is a particularly important part of its offering to owners and management teams that will remain involved post-sale. Jonathan agreed that this is a key element that helps to differentiate it from other buyers in the sector.

“We think that some of the best performing businesses are decentralised ones,” he explained, “They can deliver better outcomes by placing decision-making with management that are both experts in the business and close to end customers.”

As Jonathan states, this also means the business’ culture is not drastically changed, enabling greater continuity post-sale.

The n Industries model also means that, by remaining so centrally involved in the business, the management are also directly incentivised by the performance of their company, resulting in greater alignment and motivation.
M&A in the industrial sector

While the n Industries leadership team has significant experience in the industrial sector, the breadth and depth of their expertise means they could likely have undertaken an acquisitive venture in any number of sectors.

However, not only does the industrial sector tap into Jonathan Bates-Kawachi's expertise, it also provides a number of upsides that make it the ideal choice for an acquisitive growth plan involving a decentralised management structure.

Explaining the suitability of the industrial sector, Jonathan outlined a number of key factors. Crucially, the UK’s “significant number of high quality small industrial businesses, many of which are leaders in the niche in which they operate, often regionally or even globally.”

This means that there are a wealth of potential acquisition targets that fit the n Industries profile: profitable SMEs operating within a niche or specialism, predictable or defensible business and the opportunity to grow.

Furthermore, Jonathan explained, companies within the sector “often have good exposure to long-term growth markets”, naming examples including “healthcare end markets, trends for increased safety or security, digitisation, automation, energy efficiency and clean energy”.

According to Jonathan, the ability to tap into these diverse, highly profitable and growing trends means that many industrial businesses have “good tailwinds for long-term growth.”

The final key factor Jonathan named was the inherent scope within the industrial sector to acquire or invest in businesses, with many owners approaching retirement and other businesses “looking for a partner that work with them to help further grow their businesses.”

These combined factors were likely crucial in n Industries’ success in raising funding for their growth plan. Discussing how the company was able to raise the necessary funding so successfully, Jonathan said: “Within the UK industrial sector, I think our approach is highly aligned with what many business owners are looking for in a new owner for their business and many of our investors have seen a similar strategy deployed elsewhere with great success.”

The future for n Industries and the industrial sector
Clearly, n Industries is just getting started on its acquisitive growth journey, with a substantial war-chest to tap into, a diverse range of attractive potential acquisition targets within the fragmented industrial sector and, after just a few months of activity, a strong track record of acquisitions to demonstrate to future investors and vendors alike.

Reflecting this, Jonathan was optimistic when asked about n Industries’ pipeline and plans for the coming year: "We have a strong pipeline. We have a number of conversations ongoing and are actively engaging with many business owners. Our plan is to add further companies to the group over the coming 12-18 months and beyond.”

In terms of the broader industrial M&A landscape, Jonathan stated that it is competitive, with both trade and financial buyers vying for high-quality targets. However, he says that the group’s decentralised structure, permanent ownership model and focus on facilitating long-term growth means that n Industries is “well-aligned with what many business owners are looking to achieve through a sale.”

This has perhaps been helped by the group’s focus on smaller businesses, with Jonathan noting that the majority of private equity buyers within the sector are largely focused on targets at the upper end of n Industries’ size range.

When asked whether the sector would become increasingly consolidated over the coming years, Jonathan said: “There remain a large number of private independent businesses in the UK industrial space, so we think it will take a long time for the sector to become significantly more consolidated.”

Against this backdrop, it seems that n Industries is primed and planning for several years of strong acquisitive growth as it seeks to build a diverse group of profitable, specialised industrial businesses – a mission it is wasting no time in executing.


Acquisitive companies across numerous UK sectors are searching Business Sale Report and our Offmarket Lens tools to create acquisition shortlists and decide on M&A targets.

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