Facilities: The seller owns the real estate and is willing to offer a long-term lease to the purchaser (or sell in a separate real estate transaction). Cash flow has already been adjusted for market rent.
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.
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.
Financing: Price is NEGOTIABLE. Seller will consider financing up to 10% of the purchase price to a Purchaser qualified/approved by the Seller.
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: Retirement
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