Business Overview

NEO Business Advisors represents a highly profitable manufacturing business in Northeast Ohio with CNC and Manual Machining, Fabrication, Gear Cutting, and Equipment Building capabilities. This rare opportunity will not last long with a consistent history of over 30% EBITDA Margins. The company is a one-stop shop for customers in diverse industries that keeps work volume steady and non-seasonal. Equipment is in excellent condition and offers opportunities for growth without additional capital expenses. The business has an excellent reputation for quality, capabilities, and lead time and does not compete based on pricing. The workforce is a good mix of young, eager to learn and experienced, long-tenured employees. The business boasts about 60% repeat work with the remaining work largely variations of past parts and equipment with a 15+ year history of jobs to draw on for quotes, orders, programs, and assembly.

COVID-19 Impact Statement: The business has been operating as an Essential Business throughout COVID-19. Work volume decreased slightly but the business maintained its excellent margins. Inquiry/quote volume has returned to pre-COVID levels.

Revenue by Year:
2021 Revenue $3,890,639
2020 Revenue $3,395,517
2019 Revenue $4,048,063
2018 Revenue $4,335,747

Adjusted EBITDA by Year:
2021 EBITDA $1,225,682 (31.5%)
2020 EBITDA $1,161,015 (34.2%)
2019 EBITDA $1,390,412 (34.3%)
2108 EBITDA $1,394,383 (32.2%)

Furniture, Fixtures, and Equipment (FF&E): FF&E of $1,963,570 is included in the asking price and includes CNC lathes, CNC mills, lathes, horizontal boring mills, vertical turret lathes, gear machines, welders, grinders, work benches, pallet racks, cabinets, paint booth, paint equipment, tooling, inspection equipment, forklift, multiple overhead cranes, computers, desks, chairs, conference table, file cabinets, CAD software, and copier.

Inventory and WIP: Inventory and WIP of $965,207 is included in the asking price to be adjusted up or down for actual amount at time of closing. Inventory and WIP includes raw material, commercial components work-in-process, and finished goods inventory that is in stock and ready to ship for customers.

Real Estate: Real Estate is owned by the Seller and for sale with the business. Estimated value is $2,200,000 not included in the Asking Price. The building is approximately 40,000 SF with 37,000 SF of manufacturing space and 3,000 SF of renovated office space. True manufacturing space with multiple overhead cranes, multiple overhead/dock doors, a great location for labor, close to customers and vendors, with convenient highway access.

Growth and Expansion: The business is a great strategic acquisition opportunity for someone already in the machining, fabrication, gearing or capital equipment industries. Growth and expansion opportunities include developing a marketing plan (digital advertising, pay-per-click, social media advertising, and hiring a sales/marketing professional) to target production and higher margin work. Add or acquire a product line (proprietary, captive, or production oriented). Equipment utilization is about 50% allowing a buyer to add more employees to increase work volume/utilization without additional CapEx. The business runs one shift (M-F). Additional shifts would increase capacity without the need for CapEx, further increasing the already great margins. A buyer in the OEM equipment manufacturing industry could look at this to gain a captive supplier with a full suite of in-house capabilities while a machining or fabrication buyer would gain employees, equipment, customers, and excellent cash flow! The real estate has room for more capacity before outgrowing the current space and additional land for a future building addition.

Questions? Please contact Nick Fares at NEO Business Advisors with any questions in regard to this business for sale listing via phone at 330-283-3900 or email at Nick@NEOBusinessAdvisors.com for more information or to request an NDA. You can also visit us online at www.NEOBusinessAdvisors.com.

Have a similar business you are looking to sell? Contact Nick Fares direct or visit our website to learn more about the selling process and how we can help sell your business.

Financial

  • Asking Price: $5,750,000
  • Cash Flow: $1,442,873
  • Gross Revenue: $3,917,491
  • EBITDA: $1,292,873
  • FF&E: $1,963,570
  • Inventory: $965,207
  • Inventory Included: Yes
  • Established: N/A

Detailed Information

  • Property Owned or Leased:Own
  • Property Included:N/A
  • Building Square Footage:40,000
  • Lot Size:N/A
  • Total Number of Employees:13
  • Furniture, Fixtures and Equipment:N/A
About The Facility:

Real Estate is owned by the Seller and for sale with the business. Estimated value is $2,200,000 not included in the Asking Price. The building is approximately 40,000 SF with 37,000 SF of manufacturing space and 3,000 SF of renovated office space. True manufacturing space with multiple overhead cranes, multiple overhead/dock doors, a great location for labor, close to customers and vendors, with convenient highway access.

Is Support & Training Included:

The owner is willing to include a reasonable transition period to facilitate a smooth transition.

Purpose For Selling:

Selling due to changing family needs.

Opportunities and Growth:

The business is a great strategic acquisition opportunity for someone already in the machining, fabrication, gearing or capital equipment industries. Growth and expansion opportunities include developing a marketing plan (digital advertising, pay-per-click, social media advertising, and hiring a sales/marketing professional) to target production and higher margin work. Add or acquire a product line (proprietary, captive, or production oriented). Equipment utilization is about 50% allowing a buyer to add more employees to increase work volume/utilization without additional CapEx. The business runs one shift (M-F). Additional shifts would increase capacity without the need for CapEx, further increasing the already great margins. A buyer in the OEM equipment manufacturing industry could look at this to gain a captive supplier with a full suite of in-house capabilities while a machining or fabrication buyer would gain employees, equipment, customers, and excellent cash flow! The real estate has room for more capacity before outgrowing the current space and additional land for a future building addition.

Additional Info

The transaction shall include inventory valued at $965,207, which is included in the requested price.

The company has 13 employees and resides in a building with disclosed square footage of 40,000 sq ft.

Why is the Current Owner Selling The Business?

There are all kinds of reasons why individuals decide to sell companies. Nevertheless, the genuine reason and the one they tell you may be 2 totally different things. As an example, they may claim "I have way too many various responsibilities" or "I am retiring". For numerous sellers, these factors are valid. However, for some, these may just be excuses to attempt to hide the reality of transforming demographics, increased competition, current decrease in profits, or a variety of various other reasons. This is why it is really important that you not depend totally on a vendor's word, yet rather, utilize the vendor's solution along with your total due diligence. This will paint an extra sensible image of the business's present situation.

Existing Debts and Future Obligations

If the current entity is in debt, which numerous businesses are, then you will certainly need to consider this when valuating/preparing your deal. Many businesses finance loans in order to cover items such as stock, payroll, accounts payable, and so on. Remember that occasionally this can mean that earnings margins are too thin. Many companies fall under a revolving door of taking loans as a way to pay back other loans. In addition to debts, there may also be future commitments to consider. There might be an outstanding lease on tools or the building where the business resides. The business might have existing contracts with suppliers that have to be met or may lead to charges if terminated early.

Understanding the Customer Base, Competition and Area Demographics

How do companies in the area attract brand-new clients? Often times, businesses have repeat customers, which form the core of their day-to-day profits. Specific factors such as new competitors growing up around the location, road construction, and personnel turnover can affect repeat consumers and negatively influence future revenues. One crucial thing to consider is the area of the business. Is it in a very trafficked shopping center, or is it concealed from the highway? Clearly, the more people that see the business on a regular basis, the greater the opportunity to develop a returning consumer base. A final thought is the basic location demographics. Is the business placed in a densely inhabited city, or is it located on the outside border of town? How might the regional average home earnings impact future revenue potential?