Business Overview

This opportunity is a production metal engineering and manufacturing company that offers a wide variety of products and services, including but not limited to the design and production of rod, wire, and tube formed products servicing the lawn and garden, automotive, industrial, and other industries. The Company has the capabilities of machining, cold heading, threading, welding, forming, coining, and more. All tooling is designed and built in-house, including single hit and transfer dies, CNC fixtures, multi-slide, and custom automation/dedicated high volume machinery.

The Company was founded over 75 years ago and was purchased by the current Owners in 2012. The Owners are actively involved in the Business; both are on roughly a full-time basis, but they mutually agree that each of their individual roles could be completed in less than 40 hours per week by each of their replacements. One Owner leads the engineering of the Company’s products, and the other Owner oversees all job quoting and purchasing of raw materials. Both Owners are willing to negotiate a solution to train either new Owner(s) or new management.

The Company currently operates out of two facilities, one of which is owned through the Owners’ real estate holding entity while the other is leased by the Company. Both facilities are utilized by the Company for all purposes related to the Business’s operations. Each of the buildings have been recently renovated within the last decade and are structurally and visually well-maintained. The facility owned by the Owners has an estimated real estate value of $1,250,000. Ownership is flexible regarding the sale or lease of the real estate.

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Financial

  • Asking Price: N/A
  • Cash Flow: $481,686
  • Gross Revenue: $4,528,423
  • EBITDA: N/A
  • FF&E: $2,017,250
  • Inventory: $814,168
  • Inventory Included: Yes
  • Established: 1946

Detailed Information

  • Property Owned or Leased:Own
  • Property Included:N/A
  • Building Square Footage:41,880
  • Lot Size:N/A
  • Total Number of Employees:28
  • Furniture, Fixtures and Equipment:N/A
About The Facility:

The Company operates out of two facilities, with the first encompassing approximately 41,880 square feet and the second approximately 12,000 square feet. In total, there is 5,860 square feet of office space, while the remaining 48,020 square feet is utilized as plant space. Both buildings are in good condition from an interior and exterior perspective, as regular maintenance and upkeep have been a priority of the Owners. Each of the buildings contains 480V electrical service throughout to support the Company’s equipment and machinery. The larger facility contains four bay garage doors to fulfill all shipping and receiving activities of the Company.

Is Support & Training Included:

Ownership is willing to provide reasonable and customary assistance during the transition period.

Purpose For Selling:

Ownership would like to pursue retirement and other business activities.

Pros and Cons:

(1) All Operations Completed In-House: The entire process of transforming raw materials to finished products is completed in-house by the Company, including design, engineering, production, and finishing of parts. Keeping these processes in-house rather than outsourcing them allows the Company to be competitive in the marketplace. (2) Innovative Techniques and Equipment: As the Company designs and builds all necessary tooling attachments for machinery and equipment in-house, the Company has developed a sustainable competitive advantage as competitors have a hard time matching the Company’s customization and quality control capabilities. Quality is held to the highest standard, as proven by the Company’s defect rate of zero parts per million (PPM) with the Company’s largest customer. (3) Assurance of On-Time Deliveries: The Company prides itself upon meeting all deadlines associated with customer deliveries, which many competitors are unable or fail to do. Furthermore, the Company has met all deadlines without requiring any expediting of orders. (4) ISO Certification: The Company’s quality management systems have been assessed by a 3rd party ISO registrar, who has certified that the Business is compliant with ISO 9001:2015 standards. This certification was recently renewed and is valid until late 2024.

Opportunities and Growth:

(1) Opportunities in New Product Markets: The Company’s current capital, machinery, and equipment are extremely versatile, allowing for the production of nearly any part within any industry desired. (2) Implementing Second and Third Shift Production Schedules: The Company currently only operates with one production shift. Establishing second and third shift production schedules could drastically increase the Company’s capacity. (3) Reshoring of Parts from Oversees: The production of many parts which were previously produced by lower quality, less expensive foreign suppliers is currently returning to the United States. The Company could capture much of this business with the Company’s reputation for unmatched quality at affordable price points.

Additional Info

The business was founded in 1946, making the business 76 years old.
The deal will include inventory valued at $814,168, which is included in the requested price.

The company has 28 employees and is located in a building with disclosed square footage of 41,880 sq ft.

Why is the Current Owner Selling The Business?

There are all kinds of reasons why individuals resolve to sell businesses. However, the real reason vs the one they tell you may be 2 absolutely different things. For instance, they might claim "I have too many various obligations" or "I am retiring". For numerous sellers, these factors stand. But, for some, these may just be reasons to attempt to conceal the reality of transforming demographics, increased competitors, current decrease in incomes, or a range of various other factors. This is why it is really crucial that you not depend entirely on a seller's word, yet instead, use the vendor's response in conjunction with your overall due diligence. This will repaint a more practical picture of the business's current situation.

Existing Debts and Future Obligations

If the current company is in debt, which many companies are, then you will need to consider this when valuating/preparing your offer. Numerous companies finance loans with the purpose of covering points such as inventory, payroll, accounts payable, and so on. Keep in mind that sometimes this can imply that revenue margins are too thin. Lots of organisations fall under a revolving door of taking on debt as a way to pay back various other loans. Along with debts, there may also be future obligations to take into consideration. There may be an outstanding lease on equipment or the building where the business resides. The business may have existing contracts with suppliers that should be satisfied or might lead to charges if terminated early.

Understanding the Customer Base, Competition and Area Demographics

Just how do businesses in the location draw in new clients? Many times, companies have repeat clients, which develop the core of their everyday earnings. Specific aspects such as brand-new competitors growing up around the area, road building and construction, and staff turnover can impact repeat consumers as well as negatively affect future earnings. One crucial point to take into consideration is the area of the business. Is it in an extremely trafficked shopping mall, or is it concealed from the main road? Obviously, the more individuals that see the business often, the better the opportunity to construct a returning customer base. A final idea is the basic area demographics. Is the business placed in a largely populated city, or is it located on the outside border of town? Exactly how might the neighborhood median household earnings effect future revenue prospects?