Acquisition Opportunity
from Empire Business Associates

Cutting and Grinding Wheel Manufacturer

 Executive Summary

Empire Business Associates, a Northeast Ohio merger and acquisition firm, represents the owner of a Superabrasive Cutting and Grinding Wheel Manufacturer referred to “Company” that is available for acquisition.  Founded in 1990, the Company enjoys an excellent reputation for providing high quality, application specific custom grinding wheels used in the cutting tool, automotive, ceramic and aerospace industries with an excellent reputation for world class service!

 This is a nice business: high margins, niche business with only 50 competitors, few employees and a consumable product.  The business has over 300 customers scattered all over United States with no concentration in any given state.  The cutting and grinding wheels are made on machining equipment making this an ideal add on for another machining operation.

 Since its inception, the Company has consistently grown in size and performance, and excels in helping customers meet mission critical tooling requirements in a wide variety of wheel sizes, shapes and composites.  Additionally, the Company assists its customers by supporting the development of custom applications.  The key focus of the company in developing its niche and value is found in their ability to perfect technology to produce high quality, price competitive resin bonded wheels resulting in a superior product vs. industry competitors.

 Today, the Company specializes in three types of Superabrasive bond technology:

• Vitrified- typically used for cutting and grinding of diamond and cubic boron nitride (CBN) inserts and tools

• Resin and Metal- typically used for cutting and grinding of ceramics, carbides, steel, quartz , glass, carbon composites, powdered metals, and ferrites.

Each bond has a unique set of qualities and advantages available with a diamond or CBN superabrasive substrate.

The demands and major benefits of speed, cost savings and quality of finished goods in both dry and wet grinding applications make the use of diamond and cubic boron nitride (CBN) wheels a critical necessity for cutting, sharpening, drilling, profiling and polishing in the manufacture of high quality finished goods.  The increasingly competitive state of the cutting and grinding wheel industry as a whole is resulting in resin bonded wheels playing a progressively more important role where cost effective grinding and high quality tolerances and surface finish are vital.  Typical manufacturing applications include:

• Cemented carbides and High speed steels
• Stone grinding and polishing
• Beveling and edging decorative glass
• Structural ceramics

 The Company’s customer base includes over 300 national and international manufacturers as customers with the largest operating in the:

• Ceramics industry/ aircraft parts
• Carbide roll industry- dies/ wire drawing
• Surgical plate industry- surgical/ medical blades
• Carbide composite- aircraft manufacture

 Company annual sales have averaged $850,000+ over the past six (6) years at highly profitable and enviable gross margins.

 The Company is distinctive in that it has carved a niche and is known as a custom provider of grinding wheels that support unique applications.  Customers can depend on the Company to work closely with them in development to formulate high quality wheels specific to their unique manufacturing needs guaranteed to outperform competitive offerings by increasing wheel life and lowering customer’s cost per part.

Investment Considerations

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

• This is an excellent opportunity for a current manufacturer (competitor to the Company) of cutting and grinding wheels to increase market share by purchasing a ready and established customer list of satisfied and profitable clients (approximately 300.  Further, the purchase of the assets and intellectual property associated with the company provides access to proprietary manufacturing processes and, via acquired equipment, an increased production capacity lending to revenue growth.

• The Company has been in business for over twenty one years and enjoys an excellent reputation within the industry.

• Unlike a start-up or franchise business model, the Company has an established business model with substantial goodwill established, sustained branding, an outstanding reputation and a ready customer base with a high percentage of repeat sales and referrals coming from existing customers.

• The Company has a reputation for high quality, cost competitiveness and reasonable delivery with a “client focus”.  They provide a complete line of superabrasive cutting and grinding wheels used widely by manufacturing customers and have a reputation for reliability and integrity. 

• The Company has an established niche with its ability to provide application specific development with its customers.  This “value” affords the Company’s customers the ability to “partner” with the Company to avoid the time and defer the considerable expense of experimentation/ development on their own in making new formulation and technology available.

• The company utilizes a proprietary, high quality, price competitive resin in the manufacture of its superabrasive cutting and grinding wheels which delivers a product that outperforms competitor offerings by up to double the wheel life creating a significant competitive advantage and distinction.

• The Company provides the manufacture of superabrasive cutting and grinding wheels as its primary and majority business focus.  Upon request, the company can provide additional services to its customers and distribution partners:
  •  engineering services
  • stocking programs including consigned inventory
  • other Value Added services as determined

These services expand the core production of a product- cutting and grinding wheels-providing additional revenue opportunities.

Financial Information

Reason for Sale & Transition Plan

The owner wishes to retire from the day-to-day running of the business, as he has other personal and professional interests he wishes to pursue.   He is committed to helping the new owner in every way possible to succeed and is willing to remain available on a consultancy basis after the transition period, should there be interest on the part of 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 and finished goods), fixtures, supplies, goodwill and going concern values attached to the company. Those assets not included in the price of the business are the cash, accounts receivable (unless purchased). The company will be responsible for the accounts payable.