Business Overview

This opportunity is a precision machine products business that produces specialty components for the aerospace industry. The Company produces parts used in aircraft turbine engines, landing gear assemblies, and door latches with an approximately equal split of sales being for commercial and military aircraft. The Company employs a loyal workforce of 48 employees with an average tenure of 11+ years. The Company is a long-standing approved vendor for one of the world’s leading manufacturers of aircraft; this manufacturer represents a majority of the Company’s sales through long-term contracts.

The Company is ISO 9001:2015 and AS9100D Certified to ensure all components produced are up to the highest aerospace quality standards. Due the Company’s exceptional quality management and skilled workforce, the Company can complete most of its work in-house with the small exception of some parts that require specialty processes such as heat treating, non-destructive testing, and plating. This makes the Company a crucial step in the supply chain of its large customer. In the last seven years the Company has needed to make extensive investments into its equipment base to be able to satisfy ever growing customer demand.

The Company was founded in the 1960s by the previous owners (2 owners) and was acquired by the current owners (2 owners) upon the previous owners’ deaths. The two current owners are husband and wife; the husband is actively involved in the Business (an average of 16.6 hours per week) and the wife has no involvement in the Business. The Company boasts a workforce of 7 salaried employees with average tenure of over 30 years and 41 hourly employees with an average tenure of over 8 years. All the day-to-day operations of the Business are handled by the current General Manager who expects to stay on after the sale of the Business along with the rest of the employees. The owners desire to transition into retirement. They are willing to negotiate staying on part-time post-transaction to assist in the training of and transition into new management.

The Company operates out of a 26,000 square foot facility that features three exterior loading docks. The owner is flexible as to a lease or purchase of the real estate with the sale of the Business.

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Financial

  • Asking Price: N/A
  • Cash Flow: N/A
  • Gross Revenue: $5,848,295
  • EBITDA: $924,812
  • FF&E: $2,000,000
  • Inventory: $3,234,509
  • Inventory Included: Yes
  • Established: 1962

Detailed Information

  • Property Owned or Leased:Own
  • Property Included:Yes
  • Building Square Footage:26,000
  • Lot Size:N/A
  • Total Number of Employees:48
  • Furniture, Fixtures and Equipment:N/A
About The Facility:

The Company operates out of a single facility. The facility is 26,000 square feet, with a ceiling height of 16 feet. The facility is equipped with three exterior loading docks. The facility is in excellent condition and was built in 1975.

Is Support & Training Included:

Ownership is willing to negotiate staying on part-time post-transaction to ensure a smooth transition.

Purpose For Selling:

Retirement

Pros and Cons:

Investment Highlights Include: (1) Exceptional Quality Management – The Company is ISO 9001:2015 and AS9100D certified. These certifications give the Company an assumed reputation of quality and precision to customers in the Aerospace Industry. (2) Long-Standing Customer Relationships – The Company has had a relationship with its largest customer for over 50 years. The Company has many customers that provide repeat sales every year that keep the Company growing into the future. (3) Loyal Employee Base – The Company has 48 loyal and skilled employees. Salaried employees have an average tenure with the Company of over 30 years, and hourly employees have an average tenure with the Company of more than 8 years.

Opportunities and Growth:

Growth Opportunities Include: (1) Increase Marketing Efforts – The Company has grown over the years through long-standing relationships and its exceptional reputation. As a result, the Company has not needed to invest in significant marketing efforts, but an increase in advertising and the addition of sales personnel could help the Company grow more into the future. (2) Website Optimization – The Company’s website has room for improvement in terms of describing the services the Company offers and search engine optimization. These improvements could help the Company gain a significant online presence that could drive in more customers.

Additional Info

The venture was established in 1962, making the business 60 years old.
The sale shall include inventory valued at $3,234,509, which is included in the asking price.

The company has 48 employees and is situated in a building with estimated square footage of 26,000 sq ft.

Why is the Current Owner Selling The Business?

There are all types of reasons why individuals resolve to sell businesses. Nevertheless, the genuine factor vs the one they tell you may be 2 completely different things. As an example, they might state "I have a lot of various obligations" or "I am retiring". For numerous sellers, these factors are valid. However, for some, these may simply be reasons to attempt to hide the reality of changing demographics, increased competitors, current decrease in profits, or a variety of various other reasons. This is why it is really vital that you not rely absolutely on a vendor's word, however instead, utilize the seller's answer in conjunction with your total due diligence. This will paint an extra sensible picture of the business's existing scenario.

Existing Debts and Future Obligations

If the current business is in debt, which many companies are, then you will need to consider this when valuating/preparing your offer. Many companies borrow money in order to cover points such as inventory, payroll, accounts payable, etc. Keep in mind that sometimes this can imply that earnings margins are too small. Lots of organisations come under a revolving door of taking on debt as a way to pay back various other loans. In addition to debts, there may also be future commitments to think about. There may be an outstanding lease on equipment or the structure where the business resides. The business might have existing contracts with vendors that must be satisfied or might cause penalties if canceled early.

Understanding the Customer Base, Competition and Area Demographics

How do operating businesses in the area bring in new customers? Most times, businesses have repeat customers, which create the core of their day-to-day profits. Particular variables such as brand-new competitors growing up around the location, roadway building, and staff turnover can impact repeat customers and also adversely influence future profits. One essential 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 often, the greater the opportunity to develop a returning client base. A last idea is the general location demographics. Is the business placed in a densely inhabited city, or is it situated on the outside border of town? Just how might the regional median household income influence future earnings potential?