$4.8M
$818K
5.3x
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Exceptional opportunity to acquire a high‑barrier, certification‑driven aerospace machining company with more than five decades of continuous operation. This AS9100‑certified...
Why we like it
- Earnings quality is solid: $817,500 of cash flow on $4.8M revenue is a 17% margin, which is strong for precision machining where labor and material eat margins. Aerospace production work tends to run on longer-term program contracts, giving revenue more visibility than one-off job shop work.
- The moat is real and durable. AS9100 certification plus 50-plus years of continuous operation means the business is likely an approved vendor on active aerospace programs, and getting qualified on those programs takes competitors years and significant audit cost. That switching friction protects both pricing and retention.
- Aerospace demand is in a multi-year tailwind. Commercial aircraft backlogs at Boeing and Airbus stretch years out, defense budgets remain elevated, and the maintenance-repair-overhaul cycle generates recurring parts demand regardless of the economy. This is essential, non-discretionary manufacturing.
- An operator advantage exists for anyone who can modernize the shop floor. A 50-year-old business often runs on legacy scheduling, manual quoting, and underutilized machine hours, so a hands-on buyer with lean manufacturing or CNC programming experience can lift throughput and margin without adding a single customer.
How to improve it
- Audit machine utilization and shift structure in the first 90 days. A 50-year-old shop frequently runs a single shift with idle capacity overnight, so adding a lightly staffed second or lights-out shift can grow output on the existing equipment base with minimal capex.
- Implement a modern quoting and estimating system tied to real machine-hour costs. Legacy shops often price off gut feel or outdated rate cards, and installing accurate job costing lets you walk away from low-margin work and reprice underpriced repeat parts.
- Pursue additional aerospace and defense program qualifications. With AS9100 already in place, the marginal cost to get on more approved-vendor lists and add certifications like NADCAP for special processes is far lower than for a new entrant, expanding the addressable bid pool.
- Formalize the sales function. A five-decade shop typically relies on inbound relationships and referrals, so hiring or assigning a dedicated business development person to court new primes and tier-one suppliers can diversify the customer base and reduce concentration.
- Invest in workforce development and cross-training. Skilled CNC machinists are scarce and aging, so building an apprenticeship pipeline and documenting tribal knowledge protects the operation against key-person retirements that could otherwise cripple throughput.
- Review the equipment fleet for reinvestment opportunities. If the machine base is aging, targeted capex on newer multi-axis CNC equipment can cut cycle times, reduce scrap, and let the shop bid more complex, higher-margin parts.
Diligence notes
- Scrutinize customer concentration and program exposure. Aerospace shops often derive the bulk of revenue from a handful of primes or tier-one suppliers, so confirm the top-five customer mix and whether any single program aging out or being insourced could gut the revenue base.
- Verify the AS9100 certification status, audit history, and any NADCAP or other special-process approvals. Certifications lapse or carry corrective actions, so confirm the shop is in good standing and that certifications transfer cleanly on a change of ownership.
- Break down the $817,500 cash flow and confirm how much of the asset base is owned equipment. The 5.26x multiple is on cash flow that likely leans on a heavy machine fleet, so understand maintenance capex, machine age, and whether replacement costs are being deferred.
- Investigate the real reason for sale and key-person dependence. With years in business listed as unknown and no stated retirement, clarify whether the owner is the primary programmer, quoter, or customer relationship holder, because losing that knowledge post-close could impair the moat.
- Confirm the real estate arrangement and lease terms. The asking price does not appear to include the facility, so verify whether the building is owned by the seller and what a market-rate lease or purchase would add to the true cost of controlling the operation.
Source
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