BUSINESS OVERVIEW

Empire Business Associates, a Northeast Ohio merger and acquisition firm, represents a precision metal stamping company that is available for acquisition. Founded in 1916 by the grandfather of the current owner, the company is located in a well-maintained and updated 15,000 sq. ft. manufacturing facility in Northeast Ohio.

The company provides short, medium, and long-run precision stampings ranging in size from ¼” to 2’ in length. The company has tool and die making capabilities and provides secondary operations that include tumbling, grinding, sandblasting, tapping, reaming, resistance welding, riveting, and assembly. Metals that the company works with include cold rolled steel, hot rolled steel, brass, aluminum, copper, and beryllium copper.

The company’s customer base includes approximately fifty customers, primarily in the appliance, electrical, and construction industries. The customer base is largely concentrated in Northern and Southern Ohio, though the company also has customers in Texas and Michigan.

The customers include a number of Fortune 100 and major manufacturers. Many of the company’s customers have done business with the company for over 25 years, and the company enjoys a high percentage of repeat business. In addition, no single customer accounts for more than 15% of sales.

The company’s sales and marketing efforts have been extremely limited, and the company relies primarily on word-of-mouth and repeat business from its loyal customer base for its sales. It also utilizes several manufacturers’ representatives in Northern and Southern Ohio. The company has positioned itself as a low-cost, high quality provider of precision metal stampings, and this reputation is a large part of the company’s current marketing strategy.

As is often the case with small manufacturing companies, the owner of the company has been very involved in the day-to-day running of the business, which has not left him with much time to work on implementing marketing or other growth strategies which could help take the company to the next level. There are a number of strategies that the new owner could pursue to grow this business. First and foremost, an increased emphasis on sales and marketing should have an immediate positive impact on both sales and profits. Sales and marketing strategies that a new owner might wish to explore include hiring a full-time sales representative or a sales engineer with quality experience; developing a web site for the company; advertising in the Ohio Manufacturers’ Directory, Harris Industrial Guide and Yellow Pages; and conducting a direct mail campaign to potential customers to increase awareness of the company. Another important strategy for growth would be for the new owner to obtain ISO 9000 certification for the company, which would increase sales opportunities with both existing and new customers.

The company’s sales have been consistent for a number of years, but the owner believes that the implementation of some of the above mentioned strategies could substantially increase sales and profits. Another area of opportunity that has not been explored by the owner but could represent an additional growth opportunity for the company is the company’s location in what is known as a “Hub Zone” that gives it priority in bidding on government contracts and the opportunity to take advantage of certain types of incentives because of its location in an economically challenged area.

The company offers the buyer the opportunity to purchase a well-established business with high growth potential, a strong customer base, and an outstanding reputation within the industry. The new owner will also have immediate access to a base of long-term reliable suppliers. The implementation of a strong marketing plan and obtaining ISO 9000 certification are growth strategies that will allow the new owner to take this company to its next level of growth.

INVESTMENT CONSIDERATIONS

The company offers the buyer the opportunity to purchase a well-established business with an outstanding reputation and a strong and loyal customer base. The company is known for its excellent value in providing high quality precision metal stampings at extremely competitive prices. The many benefits of acquiring this business include:

• The company offers the buyer access to an instant base of approximately 50 active customers, with a high percentage of repeat business, and no one customer accounting for more than 15% of sales.
• Many of the company's customers have done business with the company for over 25 years, and include a number of Fortune 100 and major manufacturers.
• The company's sales have been steady and consistent throughout the years, with respectable profit margins in all of the market segments it serves.
• The company's sales and marketing efforts have been extremely limited, so a new owner with a strong marketing plan can realistically expect to increase sales and profits in a relatively short time frame.
• Sales could quite possibly be doubled in a relatively short period of time with the implementation of both a strong marketing plan and by obtaining ISO 9000 certification.
• The company is located in what is known as a “Hub Zone” that gives it priority in bidding on government contracts and the opportunity to take advantage of certain types of incentives because of its location in an economically challenged area.
• The company has over 100 machines, a mix of both newer and older equipment.
• The business has a strong established base of 20-30 suppliers that the owner has researched and identified over the years, and enjoys excellent relationships with all its vendors.
• The company has a longstanding reputation for providing high quality products at the best prices, and has very few quality problems.

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:

• Hiring a Full-Time Sales/Marketing Representative or Sales Engineer with Quality Management Experience to increase sales and marketing efforts by calling on both new and current customers and to engage in other sales and marketing activities.
• Develop a Company Web Site
• Explore Opportunities Related to the Company’s “Hub Zone” Status that give it priority in bidding on government contracts and the opportunity to take advantage of certain types of incentives because of its location in an economically challenged area
• Advertise/List in the Ohio Manufacturers’ Directory, Harris Industrial Guide and Yellow Pages
• Conduct a Direct Mail Campaign to potential customers to increase awareness of the company.
• Obtain ISO 9000 Certification to increase sales opportunities to both new and existing customers

REASON FOR SALE & TRANSITION PLAN

The owner has experienced some health issues and feels it best to retire, though he is open to remaining with the company in any variety of capacities, should the new owner have an interest in having him do so. He is willing to remain after the sale of the company, as deemed necessary, for a reasonable period of time during which an orderly transition between owners can take place. This includes the divulgence of any and all proprietary knowledge necessary to operate the business and preparation of the company’s customers, suppliers, and employees to facilitate a smooth transition. The owner is committed to helping the new owner in every way possible to succeed, and is also open to continue working with the company following the transition period on either a consultancy basis or as a full-time or part-time employee, should there be interest by the new owner.

PRICE & TERMS

The price of the Company is $995,000.00, which includes the following assets of the business: customer list, existing booked business, office equipment, production machinery, inventory (raw material, finished goods), fixtures, supplies, goodwill and 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.

6857 Creekwood
Cleveland, OH 44143
p: 440-461-2202
f: 440-461-2405
E-mail