Manufacturing & Distribution

A Practical Guide for Business Owners IMPORTANT DISCLAIMER This guide provides general educational information about tax considerations in business sales. It is not legal or tax advice and should not be relied upon as such. Every business sale is unique, and tax laws change frequently. You must consult with qualified tax and legal advisors before…

Managing inventory is one of the most overlooked steps when preparing a business for sale. Here’s what distributors and manufacturers need to know. For most distributors and many manufacturers, inventory represents a major component of their assets and figures prominently in operating profit calculations. When considering selling your business, managing inventory becomes crucial. Too often,…

What You and Your Partners Need to Consider Before Selling Your Business When multiple partners own and run a business, getting everyone to agree on day-to-day decisions isn’t always easy.  Getting partners to decide when to sell the company and on what terms can be challenging and even confrontational.   To avoid confrontation and ensure…

Injection Molding M&A trends in 2024 show deal activity returning to pre-pandemic levels of 2019, though still below the post-COVID highs of 2021-2023. Strategic buyers remain dominant, but the lines continue to blur as many private equity firms own the strategics driving these investments. Deal Count – 10 Year History – Injection Molding VALUATIONS –…

GF Data® reported on the Distribution business acquisition deal data for YTD December 2023 and while valuations are holding steady, deal volume is down 25-30% vs 2022. The decline in volume is not surprising, given the high cost of debt. However, the fact that valuations appear to be holding steady is, on the surface, surprising. Yet, when considering that perhaps only the best businesses are selling, and if valuations truly remained constant, we would expect to see an increase in multiples.

In the past two years, we saw a peak in valuations and deal volumes in the market, creating a seller’s market where deal terms were favorable.
As we move into 2023, the macro-economic picture remains relatively strong, but interest rate increases and global events may create uncertainty. Buyers, especially private equity firms, are still actively seeking acquisitions, with a focus on quality companies that will do well in any economic environment.

Over the past year, the federal government has passed legislation that will, directly and indirectly, affect manufacturing positively, and we believe it will be a supportive catalyst for further interest in US manufacturing deals. Download the full market report to gain insight into where Manufacturing M&A market is headed.

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…

EBITDA is an abbreviation for “earnings before interest, taxes, depreciation, and amortization.” It is calculated by taking operating income and adding back to it; interest, depreciation, and amortization expenses. EBITDA is a key metric widely used by financial and investment professionals operating in the lower-middle market to analyze a company’s operating profitability and estimate valuations….