Contact: Mark VanderWal
Email: [email protected]
Your Reference ID: MV1022416
After 38 successful years of creating and manufacturing innovative tools for a variety of markets, the owners/founders of this attractive business look forward to retiring after transitioning their company to only its second owner.
Currently operated in a 3,000 square foot facility owned by the sellers, the business has one full time employee in addition to the two owners. The business is located in a high-cost metropolitan area, so the sellers fully expect a new owner to move the business from its current site to the buyer’s choice of a convenient and cost-competitive location. Other than needing access to the usual metal industry supplies and services, the business is not location dependent.
For the past 20 years, the company has focused on manufacturing an innovative tool for the automotive, aerospace, and windmill service markets. The business has not advertised for years, yet the combination of its respected name and reputation keeps customers calling for new product designs and manufacturing needs. Significant investment has been made in custom CNC machinery and software to produce this niche product, creating a meaningful barrier to entry. The company focuses on manufacturing and innovation, allowing the marketing of the product to be handled by a dozen or so master distributors who sell the product globally.
Despite the lack of marketing efforts, sales have continued to increase, approaching $500,000 in 2015. Impressively, almost $250,000 of SDE (Seller Discretionary Earnings: the historical, normalized cash flow available to pay an owner and service debt) was generated in 2015. The listing price of $898,000 (a competitive 3.6x SDE) includes inventory (approximately $230,000 at cost), and fixed assets (with an estimated value in place of $180,000). This means that the goodwill of the business, including the registered trademark, is value priced at $488,000. The sellers intend an asset sale, retaining cash and A/R while retiring all liabilities at close.
The sellers have worked long and hard to create their very successful company and plan to keep it going strong by (a) offering ample post-close training for a new owner, and (b) contemplating an attractive seller note for a qualified buyer. The real estate is also available for lease or sale in a separate transaction, but, as stated above, is not a requirement to purchase the business.
This is your shot at a well-established, high cash flowing industrial operation that can be moved to the location of your choice. To learn more about this profitable niche tool manufacturer, please contact Mark VanderWal (email@example.com).
Asking Price: $898,000
Cash Flow: $250,000