This opportunity is a precision machining and fabrication business that services a diverse range of industries, including but not limited to automotive, aerospace, special machine builders, food, entertainment, testing equipment, and military. In addition to machining, the Company offers a full array of services, including milling, grinding, assembly, fabrication, and finished painting.
The Company was founded in the 1990s by two of the current owners. One owner is actively involved in the Business, and the other is passive. The Company’s General Manager also holds a minority share because he bought into the Company later on. The General Manager is a key asset to the Business and is planning to remain with the Company post-transaction.
The real estate is owned through the owners’ real estate holding entity. The building was completely rebuilt within the last 25 years and features 12,000 square feet of space. The shop consists of 9,000 square feet, and the office consists of 1,500 square feet. There is an additional 1,500 square feet of space on the second floor of the facility. The real estate has an estimated value of $800,000. Ownership is flexible regarding the sale or lease of the real estate.
Additional Information
Number of Employees: 10
Year Established: 1997
Real Estate: Owned through the Owners’ real estate holding entity. Ownership is flexible to sell or lease the facilities to the new owner(s).
July 31, 2021 (TTM) Rent: $68,250
Facilities: The Company operates out of a 12,000 square foot facility. The facility features 9,000 square feet of shop space with 2 cranes, a 26-foot under hook, and air-conditioning. The office is 1,500 square feet and has a spacious reception area, 3 offices, 2 bathrooms, and a kitchen. In addition, there is a second floor with 1,500 square feet of space. Completely rebuilt in 1997, the facility is in excellent condition and boasts an undeniable curb appeal.
Total Building Size: 12,000 total square feet. The office contains 1,500 square feet, and the shop contains 9,000 square feet. There is an additional level with 1,500 square feet of space and a concrete floor.
Support/Training: Ownership is willing to provide reasonable and customary assistance during the transition period.
Reasons for Selling: Ownership would like to retire.
Seller Financing Available: Yes
Seller Note: Limited Seller-Financing Available for Qualified Buyers.
Investment Highlights
(1) Consistent Financial Performance: Since 2016, the Company has regularly achieved $2.2M-$2.4M in revenue and has produced an average of $387K in seller’s discretionary earnings over the five years to 2020. Included in the Company’s internally developed spreadsheets is a scheduling system. The scheduling system allows the Company to track and plan the machine hours of each of its machines. This enables the Company to maximize the use and profitability of every machine.
(2) Established Quoting Process: The Company has a well-defined process for quoting jobs that use a combination of administrative steps, custom spreadsheets, and algorithms. Every item from materials and outside services to inside machining costs is quoted in the master estimating template developed internally by the Company. The master estimating template then generates project costs, markup, man-hours, machine hours by machine type, hourly machine rates, and shipping costs. A standardized quote is then generated detailing the total cost, timeline, payment terms, and assumptions made to arrive at the quotation.
(3) Substantial Equipment Base: The Company is equipped with a substantial base of machining equipment. The diverse equipment base has a wide variety of work envelopes, allowing the Company to work on a multitude of different projects, regardless of the size. The estimated market value of machining equipment is approximately $1.0M. The total market value of the Company’s assets is estimated to be $1.1M.
Growth Opportunities
(1) Recruit From Local Technical Programs: Located within close proximity of the Company is a community college that offers many technical programs to prepare students for a successful career. One of the programs offered is an Applied Technology and Apprenticeship program where students can earn a CNC Machinist Certificate with a track towards an associate degree in Manufacturing Technology. The Company has focused on hiring experienced candidates by offering competitive wages. New ownership could create a relationship with the local program’s career center to target these young but motivated individuals.
(2) Expand Equipment Base: While the Company already maintains a substantial equipment base, machines have a finite number of operable hours in a day. To increase revenue beyond current levels, new ownership could expand the Company’s current equipment base to increase capacity and service offerings while decreasing outsourced work. There is room for an additional 2-3 machines within the current facility, but an expansion of the facility may be necessary depending on the size of investment made in new equipment and the size of the new equipment purchased. The real estate includes ample space to double the size of the current facility.
(3) Website and Marketing Improvements: Website and marketing improvements such as optimizing the Company’s website for Google Ads, improving page loading times, and Search Engine Optimization (SEO) could bolster the Company’s overall marketing presence.
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