Every buyer wants a business that can easily double in size. Many businesses advertise a claim that they can, but with a deeper dive it’s discovered that doubling in size would require huge capital expenditure either in manufacturing equipment, facility or both. It’s rare that an aging founder approaching retirement will make continual investment to perfect the manufacturing cycle times.
Our new listing of a National OEM of testing and measurement equipment is a great example of what Sellers SHOULD do on the approach to retirement. They’ve been on a quest of continual perfection of the manufacturing process, instituting lean procedures and reducing cycle times with the acquisition of state-of-the-art machine tools.
Not only have they made herculean effort to perfect the manufacturing process, when they moved into their new building, they built it so that it could easily be expanded in the event they needed to.
What a Quality Buyer Looks For
A business that can easily double in size must have more
components than great machine tools and a building that can be expanded. A quality buyer might also expect it to have the following:
- No customer concentration
- A product-based business
- Trademarked and patented products
- A recognized and respected brand name
- A company whose sales function is reactive, rather than proactive, so there’s low-hanging fruit to increase.
- Pricing with plenty of room to increase without losing business
- A large worldwide market with plenty of room to grow
- Systems & Managers in place for every function
- Robust financial reporting
- 37 % Gross Margins
- A GM in place who is willing to stay with an acquirer
Does this sound too good to be true? It’s not. This Company has strong brand recognition, a proven history and the best product line-up in the industry. They’ve got systems, people and equipment in place to double in size. They can double their sales without need for additional capital expenditure. A new owner can immediately begin working on business development into new markets, confident that infrastructure is in place to handle growth.
Are You Qualified for This Acquisition?
Are you the right candidate for this acquisition? As fanatical as this founder has been about perfecting the manufacturing process, he’ll be equally stringent on the qualifications of who will take the helm next. This smart Seller knows exactly what is needed for the company to reach the next level and double in size. The ideal candidate will have a wealth of business development and sales experience. Business development experience is the one area that is lacking to bring the Company’s products to the robust European market.
It should be noted that the founder will not engage with a buyer who simply wants to acquire their competitor’s customers. There is great concern for the continuity of the Company and future opportunity for the staff.
How Accelerated Vets New Sellers
As M&A advisors, our standards are just as exacting. As a potential buyer, you should know that in order to become a client, the companies we list must go through a vetting process. If a Company can’t provide information upfront that will be needed in acquisition loan underwriting and due diligence, they don’t get to be our client. Our clients represent some of the best manufacturing acquisitions in the nation.
To learn more, return the specific NDA for this listing, which you can find here. If an engine testing equipment company isn’t exactly the type of manufacturing company you’re looking for, but you’d like to learn more about working with us, give us your wish list here. We work exclusively within the manufacturing sectors. Our clients generally have a $2-$20 million in revenues with minimum EBITDA of $500K. Even if the company is on the smaller end, if they’re listed with us, they’re a QUALITY company!