How to Sell Your Machine Shop: Considering a Merger or Acquisition

Secure your company’s legacy. You spent decades building your company. Don’t let the hard days and long nights be only for the history books. Selling your machine shop allows the legacy of your machine shop to continue into the future.  Trying to figure out if you should sell your machine shop or just close it down?  Learn more below.

Current trajectory of “mom & pop” machine shops

The ~17,000 machine shops (NAICS 332710) in the United States form the basis of many advanced manufacturing industries (e.g., defense, space, aerospace, medical, semiconductor). These shops are primarily owned and run by their founders, many of which were formed during the 1960’s (space race and nuclear competition).  With aging owners and unclear or uninterested family successors, many machine shops are just closing their doors (especially following the recent difficulties including COVID-19 work force challenges and Boeing 737MAX production pauses).  California, Ohio, and Texas have the highest number of machine shops in the United States.

What factors should founders / owners of machine shops think about before deciding to sell?

  • Selling price tradeoff
  • Ease of transaction
  • Employees
  • Customer relationships & contracts
  • Age of your equipment & facility

Advantages of selling vs closing your shop

  • Profit from the hard work you expended winning and delivering parts for long term defense programs
  • America needs your production. With the many machine shops that closed during the pandemic, our country needs your production of machined components.
  • Keep your manufacturing team together – your workforce has spent years helping your shop succeed, continue to give them opportunities to work together by keeping the shop open.
  • Selling your machine shop will require a great deal of work during the sale process, but this final phase of owning the business will allow you to reap the maximum value for your hard work.

What does Primus look for in an acquired machine shop

  • $15M annual revenue
  • Production on stable or growing defense platforms (e.g., F-35, F-22, Javelin, GMLRS, FMU-139)
  • Well maintained & modern CNC machines
  • AS9100 certification
  • Dedicated & educated work force
  • Well developed and implemented QMS

Advantages of working with Primus to sell your aerospace & defense machine shop

  • Experienced leadership team – our executives know machine shops and what makes a build to print manufacturer successful. Trust your legacy to experience instead of the transaction being a first machine shop for a search fund or private equity fund. Much of our leadership team are military veterans and are ultra passionate about providing material support to war fighters.
  • Dedicated M&A team – in most transactions the most important aspects are speed and certainty of close. Our team of experienced Mergers and Acquisition professionals combined with outside resources will make the transaction as easy as possible. They understand the nuances of BTP machine shops and won’t be surprised by the nuances of a machine shop.
  • Access to capital – Primus’s equity backers and debt financing provide plenty of capital for the sale of your company as well as for all growth needs.
  • Machine shop specific resources – from a dedicated NPI team (process engineering, CNC programming, Qa support) to machinist-specific career paths & education, brining your machine shop into the Primus network will secure the future and promote growth.
  • Backing of an industrial-focused Private Equity fund, with access to capital, debt financing, and experts across many fields.

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