In manufacturing the balance sheet does as much work as the profit and loss, and two deals with the same EBITDA can be worth very different money once machinery and working capital are counted.
Equipment, and what it is actually worth
Book value is not market value in either direction. Well-maintained machinery with service records supports a price; ageing equipment that a buyer will have to replace is a deduction they will make in diligence whether or not you raise it. Get an equipment list with ages, service history and any finance still outstanding into the data room before marketing starts.
Working capital is negotiated, not assumed
A manufacturer needs inventory and receivables to keep running the day after closing, and how much is included in the price is one of the largest single line items in the negotiation. Agree the mechanism early, in the letter of intent, rather than discovering the gap in the purchase agreement.
Customer concentration is the usual discount
A plant where one customer is a third of output is priced for the day that contract is retendered. Where concentration exists, contracts and length of relationship are the mitigation, and evidencing them is worth more than any argument about how loyal the customer is. Website Closers publishes a live page for selling manufacturing companies, which is how this record counts it into the sector.
Questions people ask about manufacturing business broker
How is a manufacturing business valued?
Usually on adjusted EBITDA times a multiple, with equipment and working capital treated explicitly rather than assumed inside the multiple. This site states no view on any particular business's value.
Do manufacturing brokers charge more?
No published evidence either way: none of the sector's brokers read for this record publishes a rate at all. The range quoted across the trade is 5% to 10% of the final sale price.
Is the building included in the sale?
Only if you say so, and a price with the property in it is not comparable to one without. Many manufacturing sales separate the two, with the buyer leasing the premises from the departing owner.