Manufacturing Success Story: Strategic Exit and Purchase

A second-generation, family-owned precision manufacturing business located in the Midwest specialized in producing custom metal components for automotive and oil and gas customers, with annual revenues of $12M and EBITDA of $2.1M. 

After 35 years of operations, the owners were seeking to sell their business while also exploring the opportunity to acquire a separate yet similar business in Florida's growing market. This initiative supported the owner's interests to move closer to retirement, although not quite ready to entirely leave the industry.

• Complex dual transaction structure requiring careful timing and coordination
• Need to maintain strict confidentiality to protect customer relationships and employee morale
• Geographic transition planning from Midwest to Florida operations
• Valuation expectations that needed to align with market realities
• Desire to retain key management team through the transition

Our team began by conducting a comprehensive business valuation and market analysis of the Midwest operations. We identified several key value drivers:

• Diverse customer base across automotive, oil and gas, and aerospace sectors
• Proprietary manufacturing processes 
• Strong recurring revenue
• Experienced management team willing to stay post-transaction
• Modern equipment with recent capital investments

We implemented a targeted marketing approach focusing on strategic buyers who could benefit from the company's established customer relationships and technical capabilities. Our process included:

• Development of a detailed Confidential Information Memorandum (CIM)
• Identification of 75+ potential strategic and financial buyers
• Coordinated outreach to qualified prospects
• Management of comprehensive due diligence process
• Structured negotiations with multiple interested parties

In parallel, we conducted a focused search for acquisition targets in Florida that met our client's criteria:

• Similar manufacturing capabilities
• Established presence in automotive and aerospace
• Complementary customer base
• Modern facility with expansion potential
• Strong local workforce

• Successfully sold to a private equity-backed strategic buyer
• Final valuation of 6.8x EBITDA ($14.3M)
• Structured deal included: 
  • 85% cash at closing
  • 15% seller note
  • Two-year consulting agreement for owner
  • Retention agreements for key managers
• Completed transaction within 9 months of engagement

• Identified and secured purchase of a Florida-based aerospace components manufacturer
• $8.5M purchase price at 5.5x EBITDA
• Strategic benefits included: 
  • Established defense contracts
  • AS9100 certification
  • 35,000 sq ft modern facility
  • Experienced local management team
• Closed within 4 months of Midwest facility sale

Our dual-transaction approach delivered significant value:

1. Maximized exit value of Midwest operations through competitive process
2. Secured attractive acquisition terms in Florida target
3. Maintained operational continuity throughout transition
4. Preserved key customer relationships
5. Retained valuable employees in both locations

"Seaside Business Advisors guided us through what seemed like an impossible task - selling our family business while helping us acquire a new operation in Florida. Their expertise in managing both transactions was invaluable, and they exceeded our expectations in terms of both timing and value." - Former Owner, Midwest Manufacturing Company

• Month 1-2: Initial valuation and strategy development
• Month 3-4: Marketing of Midwest facility
• Month 5-7: Buyer negotiations and due diligence
• Month 8-9: Midwest transaction closing
• Month 10-12: Florida acquisition search and closing

For business owners considering a similar transition, please contact our M&A advisory team to discuss your specific situation. We specialize in complex transactions and can help you navigate the challenges of buying, selling, or expanding your business.