Manufacturing M&A
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Manufacturing company valuations are often discussed in terms of multiples of EBITDA. This is because EBITDA is a common measure of a company’s cash flow that allows apples-to-apples comparisons between companies with different capital structures. We looked at manufacturers sold in the past five years, included breakouts for a few key manufacturing sectors, and summarized…
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Many private businesses survived the pandemic crisis of 2020 and have now stabilized, but for others, the perfect storm is still raging. How can business owners ensure the survival of their businesses and the ultimate positioning of their business for sale? Questions many business owners are asking BMI advisors: The good news is that demand…
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Acquirers of electronics manufacturers will pay more for certain types of businesses and will be more attracted to companies when they are properly described. Thus, the correct use of industry terminology can be an important part of marketing and selling your electronics business. Background The term OEM stands for “original equipment manufacturer”. Some years ago,…
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Buyers typically utilize a historical multiple of EBITDA to arrive at a valuation for an electronic distributor. However, a positive operating income on the Income Statement does not guarantee a high business value. A distributor’s business might look profitable (positive operating income) but may not be financially strong if cash is tied up mostly in…
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Business valuations in a sale are based on the interactions of several important factors. We have outlined the ten key factors to consider. Cash flow is the primary determinant of business value, but the other factors noted can make or break a successful transaction. The type and circumstance of different buyers will lead to varying…