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The results are out for Pepperdine’s Q3 2019 Market Pulse Report and it’s good news for manufacturing companies selling or manufacturers considering the sale of their manufacturing businesses. The Report is published quarterly and tracks Mergers & Acquisitions (M&A) activity nationally. Manufacturing Companies Selling More Than Others Manufacturing companies were the most sought after in the lower middle market and dominated the Q3 closings ($5MM – $50MM). Manufacturing and Biotech also ranked high in the $2MM – $5MM space. How Much Are Manufacturing Companies Selling For? During Q3 2019 the…
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Are you thinking of acquiring a manufacturing company? If so, it’s important to understand that when a truly interesting opportunity arises, there are likely to be multiple potential corporate buyers. After all, as Forbes points out, for a seller, the only thing better than getting an offer to buy his or her company is getting two offers to purchase it. In other words, it’s in the seller’s best interest to get as many serious offers as possible — not only to get the best price for the company, but also to…
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When you work at a high level in the corporate world, you’re often under a lot of pressure. As a CEO, you’re responsible for numerous people and hundreds of thousands — if not millions — of dollars’ worth of assets and deals. And yet even if you receive a reasonable salary, all of the work and effort you put in is essentially for other people — the company’s owner or stakeholders. So it’s not surprising if you eventually start thinking about building something for yourself. The Advantages of Buying an…
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A Google search for this title returns 165 million results in .53 seconds. Most articles talk about formulas used to calculate business valuation or formal appraisal methods. If you’re thinking about selling and are stumbling through the web to roughly calculate what your manufacturing business is worth before going to market here’s what you need to know – most of what’s on the web is absolutely wrong. Many methods of calculating value have nothing to do with how manufacturing companies trade in the current market. In this article, we’ll cover…
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When you’ve built your manufacturing business from the ground up and have experienced several years of steady revenues, you might start to think about growing it even further in order to gain more market share. And this begs the question: Should you opt for organic growth, or would an acquisition be preferable? Organic Growth As Investopedia explains, organic growth is the expansion that a business can achieve by ramping up its output and increasing sales from the inside out. In other words, organic growth is driven by internal forces, for example: The…
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Just as Baby Boomers on the lean manufacturing plant floor are getting ready to retire, so are the owners. More than 5,000 small manufacturing operations (with annual revenues between $2M – $20M) will either close their doors or find new owners in the next five years. Some of these owners are motivated to keep the business running for their seasoned and experienced employees. Others really want to “cash-out” after decades of hard work. What few of these founder/owners consider is what they can do over the next year to help…
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Every buyer seeking acquisition within the manufacturing sectors wants a business guaranteed to grow. However, in order for that to exist, the manufacturing company would have to address a need that is not only current, but guaranteed to increase over time. For exponential growth, the need would have to be greater than a particular sector or geographic region. Think of products or technologies that have solved a universal need tied to all of humanity. While everyone in every nation might not be using them yet, there is potential for worldwide…
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Making the decision to sell your manufacturing business is a big step. Actually meeting a prospective buyer in person for the first time can feel like an even bigger step. That’s why it’s wise to prepare properly to ensure the buyer meeting goes smoothly. Here are some pointers on what to do before, during and after the meeting. Before the Buyer Meeting As Entrepreneur advises, it’s critical to know whom you’re meeting with. Is it the prospective buyer — or his or her broker or advisory team? Keep in mind that…
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If you’re in the process of acquiring a manufacturing business, you’ll be expected to submit a formal letter of intent — or LOI — to the seller. So what exactly is this, and what critical elements should it contain? The Purpose of a Letter of Intent (LOI) A letter of intent is written after you’ve performed sufficient groundwork to want to proceed with further due diligence prior to an acquisition. It’s generally considered to be non-binding, but it does outline in broad strokes what a final purchase agreement could look like,…
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If you want to create more value for your company, you might be considering acquiring another manufacturing business. At the same time, perhaps you’re an entrepreneur looking to acquire an existing business to take it to the next level. In both of these instances, it’s advisable to work with a dedicated M&A advisory team that has extensive experience in acquisitions in the manufacturing industry. Because as Investopedia points out, an acquisition involves: Large sums of money. Vast amounts of paperwork. Complicated accounting procedures. Government regulations. Other legalities. – It should be…
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