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Last week I attended a mergers and acquisitions conference attended by both intermediaries and private equities. A major topic of discussion was whether or not the M&A market peaked as we enter 2019. The absolute consensus was that we are in a market bubble. Some believed the market had already peaked, others believed there was possibly another year or slightly more before the M&A market peaked. Historical Trends Where the M&A Market Peaked The M&A market has historically followed a cyclical path and there is no doubt we’re near…
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Here’s a Look at Three Positive Trends in Manufacturing Experts agree that right now is the hottest time to sell a business—especially in manufacturing M&A. The Market Pulse Report, published by the IBBA and Pepperdine Graziadio Business School, just released its 2018 Q2 report and things are looking great for business owners ready to sell. Here are a few key excerpts from the report: 1. Manufacturing M&A is hotter than hot The Market Pulse report accounts for acquisitions across various industries including business services, restaurants, wholesale, and more. Among these,…
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As 2018 draws to a close, it’s clear that our earlier predictions about President Trump’s effect on manufacturing M&A were right on target. Boosting domestic manufacturing has been a key policy focus for the Trump administration and the President is likely to build on his early successes. Removing excessive manufacturing regulations, addressing global trade imbalances, providing manufacturing reshoring incentives, reducing the corporate tax rate, and reducing unemployment by creating manufacturing jobs have been a boon to manufacturers in 2018. These efforts outweigh the impact of modest interest rate increases on the manufacturing M&A outlook.…
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The sale of most manufacturing companies will entail a portion of the purchase price be in the form of a Seller’s note. Seller’s note gives the Buyer a comfort level that the shareholders of the company they’re buying will make themselves available for training and transition post acquisition. They can also be an important bridge in the gap of perceived value between Buyers and Sellers. The approach to closing can be incredibly stressful for the Buyer. While you may have built your manufacturing business from nothing, the Buyer is acquiring…
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Manufacturers Who Are a Great Example to Others In Their Industry In our Manufacturing High-Five series, we like to give a shout out to manufacturers who are a great example to others in the areas of philanthropy, social media, or web development. This month, we’re highlighting Xometry, a Maryland based tech and software company working to improve and revitalize the American manufacturing landscape through the use of streamlined quoting, engineering, and integration within the manufacturing sector. This company excels in various aspects that make a strong business; however, their social…
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What Every Acquirer Wants Everyone seeking acquisition within the manufacturing sectors wants something different and unique. Companies with a unique product or a proprietary process are the most sought-after acquisitions in the lower middle market. Accelerated Manufacturing Brokers, Inc. has exclusively listed a company that is the sole provider to every manufacturer in the United States of a part which is widely used in the electrical and power generation sectors. Although the worldwide market for this product is large, only 2% of our client’s sales come from overseas markets, as…
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If you’re considering leaving corporate America to become an entrepreneur, you’re not alone. If you have an appropriate down payment and good credit, you’ll likely seek to acquire your way into entrepreneurship. This is a smart move considering you can acquire an established business, customer base and cash flow. Manufacturing in the U.S. is booming and is the most sought-after type of acquisition in the lower middle market. In today’s competitive climate cash flow multiples between 5 – 6x or multiple of Seller’s Discretionary Earnings is appropriate. This figure is…
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Each and every week we speak with manufacturing business owners around the country who are preparing to retire. They all have similar questions about the following: process, valuation, confidentiality and timeframe. There is one overriding question, however, that every business owner wants answered, and that is, “How is the market right now?” For manufacturers, the answer is a resounding “OUTSTANDING!” In fact, we’re seeing better conditions than we’ve seen in 25 years. Manufacturing M&A 2018 Mid-Year Look Everything we’ve sold this year, (and for the last several years) has had…
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The phrase, “What makes manufacturing companies successful?” returns 169 million results in a Google search in .4 seconds. Now in my 25th year of selling manufacturing companies, I can tell you for sure that what makes them successful is also what makes them easy to sell. Having sold both highly successful manufacturing companies and companies on the brink of bankruptcy, my organization has unique insight into what makes a great manufacturing business. I’m launching a new series of articles on this subject in the hope that some manufacturers…
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Empowering the Next Generation of Skilled Machinists In our Manufacturing High-Five Series, we like to give a shout out to manufacturers who are a great example to others in the areas of philanthropy, social media, web development, and education. This month’s featured company is Advanced Machine & Engineering Co. in Rockford, IL-a precision machine tool and metal cutting company fostering the next generation of skilled machinists. AME provides opportunities for young people to learn about careers in manufacturing through apprenticeship programs and frequent outreach. Even the title of their latest…
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