Very Profitable MI Manufacturer - $11MM in Revenues

It has been a great run for this high cash-flowing manufacturing business. Now, the owners look forward to transitioning their successful business to only the third ownership in the company’s 50 (+) year history.

Located in a desirable city in Southern Michigan, the business occupies 60,000 plus square feet of late model, purpose built manufacturing space on 14 acres. Both the building and the real estate are included in the sale.

The company operates with approximately 40 well-paid, highly skilled, non-union employees and records annual revenues of $11.0 million. SDE (the historical, normalized cash flow for new owners to pay themselves and service debt) has averaged $2.2 million annually for the past three years.

The injection molding portion of the business accounts for 60% of revenue and boasts complete engineering and production expertise resulting in high quality, thermoplastic parts to meet customers’ needs. Primary processes include injection molding and assembly/fabrication through internal value added, engineered operations.

The materials molded reads like a list from a college chemistry class: ABS, Acetel, Noryl, Nylon 6, Nylon, Acrylic, Polypropylene, Polyethylene, HDPE, High Density Polystyrene, Polycarbonate, Minlon, Celcon, Santoprene, Rynite, Uniprene, PVC, Flexible PVC, Delrin, Polyester, Glass Filled Materials, and related thermoplastic polymers.

This ISO Certified company produces parts from simple to complex, light weight to heavy using presses that range from 100 ton to over 1500 ton. The diverse product capabilities also offer insert molding, painting, pad-printing, and decorating, with secondary operations including sub-assembly, CNC secondary machining, drilling and tapping.

The business, which has no customer concentration, enjoys diversity serving many markets. A key customer has recently announced the goal of increasing annual revenue to the business by $2.0 million.

40% of revenues emanate from the distribution side of the business which entails well-established master-distribution of a private-label product line. This component boasts excellent brand recognition while enjoying steady growth and impressively recording 2023 (nine month YTD) gross margins of 40%. Noted for both quality customer-service and order fulfillment, the distribution component has a fully updated website featuring product details, CAD files, and technical support information.

The combined (injection molding + distribution) businesses are being offered on a cash free-debt free basis for $13.74 million which is comprised of three components:

=$8,140,000 (3.7x SDE: 3.70 x x $2,200,000)

=$2,500,000 (Cost Basis of Fisnished Goods Inventory)

=$3,100,000 (Current Market Value of Included Real Estate)

=$13,740,000 (Deal Value)

In addition:

1. The sellers will carry a meaningful seven figure seller note for a qualified buyer
2. The sellers and buyer will negotiate a mutually acceptable post-closing transition consulting agreement which will address length (amount of time) and seller compensation
3. The businesses come with $4.0 million (cost basis) of machinery and equipment

For more information on this outstanding business opportunity with significant barriers to entry, please contact: Mike Greengard ([email protected] or 616-450-0707).