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Apr 20, 2019It has been a great 35 (+) year run for the two owners of this successful southeast-Michigan machine tool business, and they now look forward to retirement after transitioning their company to only the second owners in its long history.

Located in an attractive newer 27,000 sf facility which was built expressly for the business, the building is located in an industrial park in a desirable community with easy access to nearby freeways. The building has a 24 ft high ceiling and two 15-ton cranes. There is ample space for additional equipment if needed. The real estate, which is owned by the sellers, can be leased at a favorable rate or purchased in a separate transaction.

The business has a skilled, loyal, well-paid, non-union 10-person work force who perform a variety of machining functions and assembly operations utilizing the company’s vast array of equipment, including many late model CNC machines. The business also has long standing relationships with suppliers that augment operations on an as needed basis thereby providing “one-stop-shopping” to meet customers’ diverse needs. True competitors are limited as few are able to match the capabilities provided by this company’s wealth of equipment which has a jaw dropping original cost basis exceeding $4.0 million, providing strong collateral for both commercial and SBA banking.

The company services customers across an array of desirable industries including oil field, aerospace, automotive, medical, defense, to name several. Strong growth opportunities would seem to be plentiful given (a) the business operates only a single shift; (b) the vast array of equipment allows for a myriad of manufacturing opportunities; (c) new business activity is currently limited to word-of-mouth (i.e. there are no marketing efforts in place); and (d) sales are primarily to local customers (i.e. within a 100-mile radius of the company’s facility).

For the past five years, the business has had average annual revenues of $3.6 million with an impressive average annual EBITDA of $650,000 over the same period. The business is being offered for $2.8 million, which given the impressive array of assets included in listing price, represents significant value to buyers.

An asset sale is contemplated with the sellers retaining cash and A/R while retiring all liabilities. The buyer will receive approximately $250,000 of inventory, the goodwill of the business, and of course all the machinery and equipment. In addition, for qualified buyers a meaningful seller note will be available, and the sellers will adjust their post-close tenure to accommodate the transition needs of the successful buyer. The ideal buyer for this business will want to parlay a desire for business growth with a background in the machine tool or related industries.

For more information on this very attractive niche business opportunity with truly prohibitive barriers to entry, please contact broker.

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