While we seem to be surrounded by constant bad news, the story here is exponentially better than most manufacturers think.
Manufacturing M&A Ends 2021 in a Strong Seller’s Market
As we conclude the fourth quarter of 2021, my firm continues to field dozens of calls from manufacturers seeking to understand the state of the M&A market and their options for exiting.
While we seem to be surrounded by constant bad news, the story for manufacturing business owners is exponentially better than most realize.
Record Sales and Faster Manufacturing Transactions
In 2021, we closed a record number of deals. We’ve seen a steady increase in prices, with the majority of transactions closing above our list price—and some selling for as much as 30% over list.
At the same time, we’ve seen a dramatic decline in the time between the marketing launch and closing, with some transactions closing in as little as four months. We’re truly in a seller’s market.
Buyers Are Investing in Employees and Management
Another interesting development is buyers’ willingness to give key managers equity in the company as an incentive to remain long-term. Some buyers are even giving all staff members the opportunity to earn equity.
In every transaction, all employees were retained, with some receiving better benefits than they had with the selling company.
All-Cash Deals Across Manufacturing Sectors
Deals closed during the fourth quarter were all-cash transactions with no financing contingencies. Recent transactions involved companies in the following sectors:
- Aerospace components
- Defense contracting
- Medical instrument components
- Agricultural equipment components
- High-pressure valves
- Specialty vehicle HVAC
- Electronic contract manufacturing
Flexible Transitions Based on Each Seller’s Goals
Some clients wanted to remain with their companies following the sale, while others wanted a quicker exit. In each case, we were able to achieve the client’s desired outcome.
National Reach Attracts Qualified Manufacturing Buyers
Our 2021 transactions ranged geographically from the East Coast to the West Coast and throughout every region in between.
Because we work nationally and exclusively within the manufacturing sectors, we typically sell more manufacturing companies in a given year than any other firm. This allows us to bring the best and most qualified buyers to our client companies.
Sell to a Buyer You Can Trust
It really is possible to sell your manufacturing company to someone you can trust to:
- Respect your legacy
- Grow the business
- Keep jobs in the community
You can achieve all of this while selling at a number you’ll be thrilled with. Reach out today to schedule a call and learn more. Consultations are always confidential and provided without obligation or cost.