Acquisition Opportunity

BUSINESS OVERVIEW

Empire Business Associates, a Northeast Ohio merger and acquisition firm, represents the owner of a fabrication company that has a subsidiary product line that specializes in the design and manufacturing of process equipment, including ball mills, cone blenders, vee blenders, laboratory blenders, and tank plug valves that is available for acquisition. Founded in the late 1950s, the company is located in Northern Central Ohio and enjoys an excellent reputation as a high quality manufacturer of custom designed grinding and blending equipment.

Over the past ten years the company has custom designed industrial grinding and blending equipment for a base of approximately 170 customers, which include the following industries:

• Paint and pigment manufacturers 9.4%           
• Chemical manufacturers 28.8%
• Powdered metals industry 30.6%
• Mining and minerals industry 14.1%
• Ceramic industry 17.1%

An estimate of the company’s sales by broad product category is as follows:

• Ball mills – approximately 70%
• Blenders – approximately 25%
• Valves – approximately 5%

The company’s marketing efforts over the years have been minimal, and for the past three years especially have been very limited. Most of the company’s sales are from word-of-mouth advertising and repeat sales from the company’s loyal customer base. The implementation of a targeted marketing program could have a significant impact on the company’s sales and profits.

The company offers the new owner an outstanding opportunity to purchase a well-established business with an excellent reputation, a built-in customer base, and high growth potential with the implementation of a modest marketing effort.

INVESTMENT CONSIDERATIONS

There are numerous benefits for the buyer who purchases this well-established business, including:

• The company has been in business for over fifty years and enjoys an excellent reputation within the industry.
• The company has a customer base of approximately 170 customers, with significant repeat sales.
• The company’s sales have not been impacted to any major degree by foreign competition, as buyers of this type of equipment prefer to purchase from a domestic supplier they know and trust.
• The ball mill segment of the business, which represents approximately 70% of the company’s sales, has evolved into a niche market opportunity due to changes in technology and the market, and the company has a significant share of the market (for ball mills in the size range it manufactures) in this segment of the industry..
• While the majority of the company’s sales are from customers east of the Mississippi, it has domestic customers throughout the United States.
• The company’s marketing efforts have been extremely limited, so even a modest sales and marketing effort could result in increased sales and profits for the new owner.
• The business can be easily moved and relocated anywhere.

FINANCIAL INFORMATION

FUTURE STRATEGIES FOR GROWTH

There are a number of strategies that could be implemented to help take the company to the next level. These include:

• Resume Advertising in the Thomas Register, which was the company’s major marketing and advertising venue until a few years ago, when it was discontinued.
• Improve the Company’s Web Site and Internet Presence, as the web site has not been updated for several years
• Improve Internet Advertising to increase the number of “hits” when companies search for these services
• Rebuild and Strengthen the Company’s Network of Sales Representatives
• Advertise in Industry Trade Journals
• Increase the Company’s Attendance and Participation in Industry Trade Shows

REASON FOR SALE & TRANSITION PLAN

The owner of the company had been a part owner of the industrial grinding and blending manufacturing subsidiary company and purchased his partner’s interest in the business three years ago. While the subsidiary product line is a strong business on its own, the owner has made a business decision to focus his attention on the fabrication segment of the company, as he feels that the grinding and blending manufacturing business will be best served by an owner who can put more attention and marketing effort into the business. The owner will assist the new owner in the transition following the sale of the business, including the divulgence of any and all proprietary knowledge necessary to operate the business and preparation of the company’s customers, vendors, and employees to facilitate a smooth transition.

PRICE & TERMS

The price of the Company is $395,000, which includes the following assets of the business: customer list, existing booked business, office equipment, engineering drawings, schematics and specifications, sales literature and reference materials, know-how goodwill and on-going concern values attached to the company. Those assets not included in the sale of the business are the cash, work-in-process, accounts receivable, and accounts payable. The owner would prefer a cash sale, though he is willing to finance part of the purchase price for a qualified buyer.