It has been a great 30 (+) year run for the owner of this successful 60 year old machining business; however, a combination of retirement looming and some 2024 health scares has resulted in his plan to transition his business to only its third owner in its long history. His health and age could result in your opportunity.

Located in a desirable, small town in southeast Michigan, the business operates from a 14,000 square foot facility on a two acre plot. The real estate (land and building) are both included in the listing price.

The company employs seven full-time, skilled, loyal, well-paid, non-union machinists and one full time office manager. The preponderance of the company’s revenues come from ten businesses primarily located in Michigan with a smaller presence in Ohio, Indiana and Illinois. There is no customer concentration.

Now, let’s look at the numbers. Over the past four fiscal years (the business is a ‘C’ corporation with 10/31 fiscal years), top line revenues have averaged $1.45 million while SDE (seller’s discretionary earnings – the historical, normalized annualized cash flow available to pay the owner and service debt) is $250,000 over the same four year period.

Using an industry acceptable SDE multiple of 2.95x multiplied by the SDE figure results in an enterprise value of $741,000 million to which the current market value of the real estate ($850,000) is added to the cost basis of the on-hand raw material ($48,000) resulting in a total business valuation (and listing price) of $1,640,000 million.

The seller envisions a sale in which he retains the cash and A/R in the business at close while retiring all liabilities. He is also prepared to carry a $245,000 seller note for a qualified buyer.