The logical buyer would be a strategic industry player with the ability to leverage the company’s attributes to improve overall financial performance. Strategic Buyers are often looking to break into new markets and industries. It is often easier to buy a customer list than to develop customers organically in new sectors such as aerospace and medical. Strategic buyers may have already made investments in new equipment and technology; their strategy might be to buy a book of business to add customers with known sales and gross margins to help support their debt service.

A strategic buyer could potentially make the new parts on their updated production equipment with a shorter setup time and faster production times, allowing the buyer to achieve a quicker return on investment and improve the gross margin. Many strategic buyers desire to expand their existing capacity by acquiring skilled labor and management to help them meet their customers’ demands. Some buyers need to expand their service offering for their existing customers who may prefer “one-stop-shopping.” For example, a metal fabrication company may buy a CNC company to compete better.

With a strategic buyer in mind, we built a “Pitch Deck” describing our client’s attributes, financial history, backlog, organizational structure, production capabilities, equipment list, industries serviced, customer types and length, and strength of customer relationships.

Filtering Next Point’s proprietary database of over 24,000 companies in the metal manufacturing industry to include regional, national, and Canadian strategic buyers with revenues at least three times greater than our client’s income produced the following results:

• Over 12,000 strategic buyers in the USA in Canada.
• Three hundred forty serial strategic buyers with a history of multiple transactions in the metal contract manufacturing space.
• Thirty-five regional strategic buyers within a 50-mile radius of our client that were actively looking for new acquisitions.

Marketing the company required casting a wide net to find the right buyer. We aim to run a time-sensitive process, asking interested buyers to submit a letter of Intent by a deadline so that we have the opportunity to compare offers.