Niche Market Aerospace Tooling Manufacturer & SOLD for 4.1x Sellers Discretionary (Stock Sale)

Price: $4,400,000

Location: North New Jersey

Industry: Aerospace,Aviation,Defense,Manufacturing,Distribution,Robotic Soldering

Listing ID: BAE201508


Listing Description

This Company manufactures precision production tools & equipment for major Aerospace and Electronics Manufacturering Companies. Their excellent quality products focus on design, construction, and assembly of electronic components and circuit board assemblies.  They are also top producing exclusive distributors of foreign produced robotic soldering manufacturing equipment.

They have  customers and agents(reps) across the globe  that sell to 17 different countries and some of the most prominent  corporations in the world like NASA, Lockheed Martin, Northrop Grumman, Boeing, GE, Raytheon,  Honeywell,  Motorolla , and the list goes on. This business has more than 300 Active customers. Their customers end-use industries include: Military Satellites, Defense Electronics, Automotive, NASA Satellites, International Aerospace, OEM’s, and Computers & Electronic Products.

 

Their business model consists of four main revenue streams.

 

1) Production of equipment used to manufacture electronic components and printed circuit boards.

2) Domestic distributor for foreign equipment manufacturers seeking access to the U.S. market

3) Performing insourced fabrication services for companies not looking to purchase the equipment.

4) Providing equipment repairs and parts in support of tools that were purchased from them.

 

Products include Tooling Hardware, Presses ( Servomechanism & Compressed Air), PCB Racks, and PCB Fixtures, Robotic Soldering, Hot Bar Soldering and Depaneling Equipment.

 **Business Acquisition Experts structured the sale of this business as a stock purchase transaction. The acquirer of this business and several other buyers competing to buy this company originally made offers north of 5x Sellers Discretionary Earnings “SDE”. However, the tax implications for our clients were extremely harsh because they were a C-Corporation. Seller’s of C-Corps are double taxed at the corporate and personal income tax levels if the deal is structured as an Asset Purchase. BAE reduced the top line purchase price by over a million dollars but the restructuring saved our clients over $1.3 Million in tax liability….it’s ALL about the terms!!
Having Professional M&A Advisers working on your behalf to sell a business almost always adds value. In this deal, we added a TON!
http://acquisitionspro.com/stock-purchase-vs-asset-purchase/

 

Listing Details

Down Payment: $3,900,000

Total Sales: $4,700,000

EBITDA: $1,100,000

Accounts Receivable: $335,000

FFE: $1,350,000 (Included in Price)

Inventory: $1,100,000

Lender Pre-Qualified?: Yes

Terms and Conditions?:

This Company is a C-Corporation. In an effort to dodge double taxation and drastically reduce their tax liability, we are seeking a Stock Purchase transaction.

Reason For Sale:

This Company is led by two stockholders. The president and majority stockholder wishes to sell his entire stake in the company for retirement. The vice president and minority stockholder wants to retain his 15% equity stake in the company post close and wishes to remain with the company for many years to come.

Training & Support:

Full training and support. The exiting owner has agreed to remain with the company for a one year transition period after the sale and will potentially agree to remain as a paid consultant.

Operation

Year Established: 1972

Days & Hours of Operation: Mon-Fri 8-4

Owner Hours Per Week: 40

Employees: 16

Managers: 3 Managers (Sales, Production, and HR)

Location

Lease Option: 10 Years

Monthly Rent: 15,500

Type of Location: Commercial Stand Alone Manufacturing Facility

Square Footage: 21000

Summary

Competition:

 This Companys competitive advantage lies within their knowledge, reputation, expertise, and experience. Their customers have established major confidence in them thus earning them an excellent reputation in the electronics industry and with other manufacturers.  Their “Blue-Chip” customer base is evidence of this.  They pride themselves on a high level of responsiveness in concert with competitive pricing- as an added reason why they have grown at rates much faster than the competition.  They also have key competitive tactics within their particular product lines. Competition is minimal; Very few have the production capabilities comparable to this company.

Potential Growth:

 

UNLIMITED! A significant number of their products currently address only a fraction of their respective addressable markets. A new owner is capable of increasing revenues substantially globally marketing current and new product lines and moving the company in the future to a larger facility. They have established excellent distribution channels creating an opportunity to represent additional manufacturers. They are currently an exclusive distributor for North America for a major Asian Company that has UNLIMITED potential in the U.S. , Mexico, and  Canada.The  Aerospace and Aviation Sector as a whole has consistently acheived YOY growth for decades and is the Most active sector for M&A due to huge runway for growth.

 

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