Every buyer wants a business that can double. Whether that exists without heavy capital expenditure, and how to tell.
Every buyer wants a business that can easily double in size. Many businesses advertise that they can, but a deeper dive reveals that doubling in size would require major capital expenditures in manufacturing equipment, facilities, or both. It's rare for an aging founder approaching retirement to keep investing to perfect manufacturing cycle times.
Why This Acquisition Might be Right for You
Our new listing of a National OEM of testing and measurement equipment is a great example of what Sellers SHOULD do in their approach to retirement. They've pursued continual perfection of the manufacturing process, instituting lean procedures and reducing cycle times by acquiring state-of-the-art machine tools. Not only have they made a herculean effort to perfect the manufacturing process, but when they moved into their new building, they built it so it could be easily expanded if needed.
What a Quality Buyer Looks For
A business that can easily double in size needs more than great machine tools and an expandable building. 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 have systems, people, and equipment in place to double in size. They can double sales without additional capital expenditure. A new owner can immediately begin developing new markets, confident the 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 about who takes the helm next. This smart Seller knows exactly what the company needs to reach the next level and double in size. The ideal candidate will have extensive 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. The founder will not engage with a buyer who simply wants to acquire their competitor's customers. There is serious concern about the Company's continuity and future opportunities for 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 upfront information needed for 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.
Conclusion
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 $3-$30 million in revenues with a minimum EBITDA of $500K. Even if the company is on the smaller end, if they're listed with us, they're a QUALITY company!