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heavy industrial repair

Companies that do heavy industrial repair generally work on very high margins. This is especially true when the repairs are of a nature that if not done quickly would cost their customers millions in lost revenue.  Applicable sectors might be steel mills, paper mills, food and beverage production or pharmaceutical production lines. When these production lines are down, the companies that get them up and running quickly are considered heroes and can generally charge at incredibly high margins.

Such is the case with our listing of a MidAtlantic based company who cut their teeth in the power transmission components sector. Over time they became known for their ability to reverse engineer and provide repair and replacement services to a variety of industries, including heavy industrial repair and many of those mentioned above.

While they still perform their core function of manufacturing gears and gearboxes, they’ve become the go-to source for heavy industrial repair and emergency repair work to customers who simply can’t afford to have their production lines down. This is reflected in their numbers with 50% gross margins and 33% net margins. Depending on the mix of work, gross margins have been in the 70% range in some years.

The company boasts highly trained but younger workers with the Seller no longer involved in the day-to-day. To learn more about this company, you can access the required NDA Here.

The ideal buyer will have the following characteristics:

  • Relevant industry experience
  • A history of successful business development experience
  • Enjoy investing in a rural community
  • Willing to pay an appropriate multiple – this is not a distress situation

Even with the great cash flow and margins, this company is operating at only 30% of its capacity. There’s plenty of room to grow. They’ve never had a sales force and they do not promote themselves in any way. Most business is repeat in nature (parts wear out), and new business comes through word of mouth.  So do the math – they’re only at 30% of capacity and they’re not even trying to get new business. What could you do with an opportunity like this heavy industrial repair company?

About Frances Brunelle

Frances Brunelle is the founder of Accelerated Manufacturing Brokers, Inc., which specializes in the sale of lower middle-market manufacturing companies nationally. Fran and her team help to ensure the continuity of U.S. Manufacturing by transitioning ownership to the next generation of entrepreneurs. Recently Fran was named to 2020 Most Influential Women in Mid-Market M&A (Mergers & Acquisitions). Fran will also be the host of WAM (Women and Manufacturing) podcast, a Jacket Media production. Fran writes on topics that help manufacturing business owners prepare their companies for sale and navigate the sale process to ensure a positive financial result in support of their retirement.

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