Asking Price: NEGOTIABLE
TTM Sales: $7,900,000
TTM Adjusted EBITDA: $1,850,000
Business Description: The Company is a well-established Precision Machined Engineered Parts and Assemblies machine shop specializing in close tolerance machining of titanium, steel, aluminum, stainless, castings and forgings. Company serves Defense, Aerospace, oil & gas, and other industries and has all required certifications. Defense continues to dominate growth in current orders, new projects, and long-term opportunities. Customers are located throughout the United States, but primarily in the Southwest. Company was primarily a prototype manufacturer and gradually evolved into the current combination of prototype and production machining.
Business grew quickly by direct marketing to manufacturers, and focusing on creative, cost-effective, timely and quality machining of parts and subassemblies. Continued growth was driven by a proven reputation, word of mouth and repeat business. The Company has both diverse prototype and production machining strengths and can respond to both product development and ongoing production client demands. The Company has continued to invest in equipment, personnel, and systems. The business has EXCELLENT CLEAN BOOKS & RECORDS. The owner estimates that the business is operating at approximately 60-70% capacity. Backlog is approximately $4,750,000. NOTE: All statements, figures, and values are subject to a prospective purchaser’s due diligence.
The company is a profitable business with rapid growth potential. The top 7 customers account for 90%+ of revenue. However, this does not tell the entire story, because the Company’s proven track record with major customers results in regular new, ongoing business opportunities. Several existing customers have multiple business units that contribute to revenue. The company continues to expand their customer base and influence, with multiple new, INCREMENTAL Aerospace and Defense projects currently underway.
The company does no significant outside advertising. The company receives repeat business and referrals from ~40 companies. The owner feels that the business could increase profits and sales by adding a sales engineer, implementing business development meetings with existing customers, strategic hiring, and capital investment. The owner plans to retire and is offering the Machine Shop business for sale.
Growth & Expansion: The company does no significant outside advertising other than website and listing in industry associations. The primary marketing strategy is the Company’s proven track record with major customers; they routinely receive repeat business and referrals. The company continues to expand their customer base and influence, with multiple new, INCREMENTAL Aerospace and Defense projects currently underway. The owner feels that the business could increase profits and sales by adding a sales engineer, implementing business development meetings with existing customers, strategic hiring, and capital investment.
Machine Shop Competition: The machine shop industry is very competitive. Despite the presence of competitors, the Company has thrived & grown and possesses SIGNIFICANT scalability/growth for a new owner. The industry is large but very fragmented; industry estimates are approximately ~$53 billion in annual revenue shared across ~17,600 firms. There are no significant dominant players. Amid the rapidly expanding demand for machined parts, industry sales were up approximately ~4% in 2022. In fact, the industry has grown ~3.3% per year from 2017 to 2022. Industry figures imply an average size per firm of ~$2.5 million per year. As such, this business is an above-average sized firm. Demand for machine shop services is rebounding with growth driven by demand from the industry’s major markets including aerospace, defense, energy, transportation, and manufacturing.
Barriers to entry in this industry are significant. Major capital outlays are required in capital equipment, land, and facilities. Further, the industry requires a skilled workforce with unique expertise. The labor market is competitive, and Company has a robust recruiting, training, and retention plan. Additionally, firms must be certified to do certain types of work according to industry or specific standards. Those certifications take time to acquire and must be maintained. Finally, selling channels take years to cultivate and it is difficult for new entrants to offset the goodwill inherent in pre-existing, long-standing relationships.
Support & Training: Seller will train purchaser for 4 weeks included with the purchase price. Seller is willing to provide additional training or remain in a technical sales role for 1-3 years at mutually agreeable compensation.
Reason for Selling: Preparation for retirement.
Purchase Price: The price for the business is NEGOTIABLE. Structured as a stock sale, the assets will include net working capital of $600,000 calculated as inventory, work in process, prepaid expenses + plus accounts receivables less assumption of accounts payables, accrued liabilities + assumable equipment capital leases. The seller estimates that FFE/V (Furniture, Fixtures, Equipment, Vehicles) is valued at $3,250,000 FMV. The price will be adjusted for actual net working capital as of the sale date. Assets excluded from the sale include real property, cash, securities, owner personal effects, etc. The seller will consider seller-financing up to 10% of the Price to a qualified Purchaser approved by the Seller. Seller prefers to sell for ALL CASH.
NOTE: The sale of a business is confidential and discreet; PLEASE DO NOT VISIT THE BUSINESS OR SPEAK WITH ANY EMPLOYEES. We know about many businesses that are for sale but might not be advertised. Check out www.adamnoble.com for more information and consider registering your criteria as a purchaser.
For information, reference TX Precision Machined Engineered Parts and Assemblies Shop Business for Sale 20075 and contact Jeff Adam, PE, MCBC, FRC, CBB at Adam Noble Group, LLC
Phone: (817) 467-2161
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During 3 decades of M&A service, Jeff Adam has successfully completed the sale of over 700 businesses and advised or completed 1,000’s of business valuations and exit plans. An entrepreneur in his own right, Jeff has started and grown 12 companies in fields including international finance, B2B services, business valuation, construction, screen printing, Mergers & Acquisitions, engineering, and manufacturing. Jeff has donated his time as a distinguished speaker at numerous national & international conferences since 1977 covering topics such as environmental services, engineering, media, craft breweries, exit planning, business valuation, charitable giving, management, business brokerage and M&A fields.
Jeff is President of Adam Noble Group, LLC, a national M&A Advisory firm, professionally valuing and confidentially selling profitable businesses owned by exit-motivated business owners to qualified strategic, corporate, private equity, partners, management, and first-time buyers. Jeff establishes rapport, builds trust, and educates business owners in the steps to meet their goals as they prepare and achieve the discreet, confidential exit of their business. Jeff exclusively represents sellers of $1M-25M value enterprises and endeavors to transfer their businesses to qualified, capable acquirers who will build upon the seller’s vision, goals, culture, and history. Jeff maintains lifelong repeat and referral relationships with sellers, their acquirers, and service providers.
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