Manufacturing Business Brokers

Mergers & Acquisitions and Business Brokerage Services for the Manufacturing Industry

Raincatcher’s Partners and Managing Directors have completed over a billion in combined transactions throughout their careers. We offer an investment banking style auction process to lower middle market companies.

Our award-winning team is largely comprised of former small business owners, public accountants, and middle-market investment bankers. Our clients have trusted us to sell over $500M in small and mid-sized businesses.

How We Work With Our Manufacturing Clients

If you’re interviewing M&A advisors and business brokers in search of someone who understands your manufacturing business, has a strong buyer list of investors (including family offices, private equity funds, search funds and entrepreneurs), and has proven experience in closing deals over $100m, then you’re in the right spot.

While we call ourselves industry agnostic, we avoid a handful of industries, such as reimbursement-related healthcare, energy, life sciences, etc. Likewise, our team is very well-versed in a handful of industries. This list includes manufacturing, SaaS, tech, construction, and industrials. If you would like to learn more about how manufacturing companies are valued and sold, have a look at our manufacturing business valuation article.

How The Landscape For Selling Manufacturing Companies is Changing

The reshoring of the US manufacturing industry has compounded in recent years due to the demand from customers throughout the COVID 19 pandemic and the industrial automation technology that many manufacturers are now able to implement in their business. This technology makes manufacturing a much less human capital-reliant industry than it once was, thus decreasing the cost efficiency of manufacturing products overseas.

Private Equity has taken notice of the demand from customers for USA based manufacturers products and are pouring more and more capital into the sector each year from 2020 – present.

Experienced Manufacturing and Industrial Company Business Brokers

Collectively, our manufacturing business brokers have completed well over $100m in transactions for U.S.-based manufacturing companies, primarily utilizing our sell-side auction process. We specially designed this process to maximize proceeds for lower middle-market companies.

Valuation Specifics for Manufacturing Businesses

Industrial companies and in particular manufacturing companies have been in increasing demand from private equity groups and other business buyers. Additionally, this industry is growing as many companies are bringing their manufacturing capabilities back stateside as opposed to relying on cheaper, over-seas labor. Manufacturing technology has also minimized the cost of creating components and allowed for US based, lights-off facilities to increase in number.

What Value Does a Manufacturing Business Broker Add?

A manufacturing business broker adds significant value to a business owner by facilitating the sale \of their manufacturing business. Understanding the nuances of the manufacturing industry and what buyers are looking for will help to give accurate valuation guidance, get the business in front of the right investment groups and accurately present the opportunity.

Manufacturing-focused business brokers also provide access to a network of potential buyers that have a focus on various types of manufacturing companies. Overall, a strong broker will be able to streamline the sales process, get your business in front of the right investment groups, optimize the deal terms, and enable owners to achieve their financial and strategic objectives.

There are a number of publicly traded manufacturers that look to grow through acquisition. This not only allows them to increase their headcount of skilled laborers, but it also increases their manufacturing production capacity and catalog of products. Manufacturing business buyers look for their acquisition targets to meet as many of the below qualities as possible:

Manufacturing Company Criteria

  • Highly automated. Ideally lights off
  • Long-run contracts more than job shop manufacturers.
  • Barriers to entry. This could be contractual, capabilities that your facility has, certifications that you’ve acquired, or other.
  • Manufacturing a component with an enduring need and is not cyclical
  • A quality facility that has invested in state-of-the-art manufacturing technology
  • A strong team in place
  • Strong margin (20%+ ideally), proving that your products are not commoditized.
The Raincatcher Process

Our Specialized M&A Advisory Auction Process for Manufacturing Companies

Our M&A Process is Specifically Designed to Maximize Transaction Proceeds and Terms for our Clients with $500k+ in Annual EBITDA

Sell-side due diligence

Due diligence is traditionally done by business buyers and not business brokers. However, our comprehensive sell-side process includes a diligence process before we bring a business to market. Learn more about diligence on our M&A consulting post.

Our comprehensive diligence process is designed to drive the highest value for the business owner as buyers know that there won’t be any skeletons in the closet once they submit an offer and start spending money on legal and financial diligence.

Specially designed brokerage or M&A auction process

Depending on the size of your business and industry your company operates in, we may recommend a traditional brokerage process with a listing price. Or, a competitive auction process with buyers submitting the price and terms for negotiation. 

Our buyer list is comprehensive and will be tailored to include (or exclude) and participants in your industry who may make great strategic buyers or who you want to avoid knowing the business is on the market.

Short-listing finalists

It isn’t uncommon for strong, sizable companies to get 5+ indications of interest (soft offers). We’ll then validate those buyer groups, attend dinners where they meet out clients, prepare further data on the business and negotiate the deal terms that buyers will propose in their final offer.

Negotiate LOI terms and facilitate diligence

Once LOI’s have been received from potential buyers we work with our clients to select the most attractive offer before executing the exclusive LOI.

It’s common for diligence to take 60-90 days before closing. This requires a significant time commitment from all parties. Additionally, final deal points are negotiated and contested during this period.

More Manufacturing Resources

If you’re interested in selling your manufacturing business, we’d suggest you start by setting up a consultation with us and reading our selling your manufacturing company article.

What Our Clients Have to Say

Request A Consultation

If you’re a business owner and you are currently entertaining selling your business in the coming years, we welcome the opportunity to get introduced to discuss our M&A, Exit planning and Advisory services.

Business Broker FAQs

We aim to provide complete transparency to our clients to help illuminate what can prove to be a complicated process of selling their business.

How Long is the Process to Sell A Business

Most of our clients are lower middle-market companies ($500k – $10M in EBITDA). Clients in this size range typically benefit from a full auction process as it will drive multiple bids for their business. This process takes 7-9 months on average.

The reason we typically opt for a full auction process when selling businesses is that it; does not cap what a prospective buyer is willing to pay, it allows for a thorough marketing process that typically culminates in receiving multiple bids for the business and allows buyers to table a price and structure that they feel comfortable with. We can then work with the seller to short-list final potential buyers, meet with them and decide which offer is most appealing after receiving letters of intent (LOIs).

Is The Selling Process Confidential?

Yes. We make every prospective buyer register with us, sign an NDA and go through a vetting process before they ever see the name of a business that is listed for sale.

We understand the importance of a confidential process and only communicate directly with our client, the business seller. We’ll never call your general business line or speak to any of your employees about the sales process without our clients “okay.”

Furthermore, we will only market your business to a competitor, supplier, customer or other business that you may work with if you “okay” that person from our list of strategic buyers that we work with you to prepare.

How Many Businesses Do You Sell Per Year?

We work as partners or as teams of three on most of our clients deals. On the average year each member of our team will be a part of 4-6 successful closings.

We are able to team up on deals which allows for our team members to fill into the spot of the business selling process that they are best suited for, be it financial analysis and recasting, deal marketing, negotiation, due diligence, etc.

How Do Business Brokers Get Paid?

Like most business brokers, we charge a small retainer when signing a client on, but primarily get paid by charging a success fee that is a percentage of what we are able to sell the business for. This fee varies based on the size of the business, how quickly it will sell, how much preparation work and sell-side due diligence will be required from us, etc.