Finding and Repositioning a Great All-Around Moldmaker as a Healthcare Specialist

The company used a general purpose moldmaker focused on higher-cavitation packaging and automotive molds.  Declines in the automotive market significantly impacted sales and profitability. We made a synergy plan to shift this impact: Work with plant leadership to reduce lead times and embrace lower-cavitation mold-making Created marketing campaign and accepted some lower margin opportunities to […]

SKU Management and Overhead Reductions to Save a Labware Diagnostics Family

400 SKU / 3 product labels of labware diagnostic disposables (pipette tips, vials, trays) being sold through distribution, largely to university research laboratories. The company had $2 million in negative EBITDA in the prior year and hadn’t made money in several years. We made them a turnaround plan: SKU rationalization – focus on the SKUs […]

Repurposing a Large-Scale Packaging Facility

We repurposed a high volume, fully automated 210,000 sq/ft molding facility that had historically serviced a declining end-market. This was our turnaround plan: Completed a sale-leaseback at closing to reduce the net purchase price to $4M Negotiated higher pricing with largest customer Reduced overhead Moved from 5 shifts to 4, reducing indirect and direct labor […]

Medical Device & Diagnostics Manufacturer

Nearly 100% medical device and labware diagnostics molding company that was run-rating at an annual loss of $2M at closing due to customer losses. We developed a turnaround plan to get this company back to positive. These were our steps: Reduce overhead Reduce toolroom staffing and exit the toolmaking business Automate 17 injection molding machines […]

Improvement Opportunities In Manufacturing Targets

While none of these should preclude an acquisition, we’ve come to witness several variables that suggest that an acquired company may need extra help.  These include: Are the finance employees familiar with using your preferred (or an analogous) ERP system, or will they be learning to use a sophisticated system anew? Will the target be […]

How is the Purchase Price Determined?

While not universal, the most common practice is to take a target company’s EBITDA (which may be an adjusted number) or its EBITDA less CAPEX (in the case of businesses that require meaningful CAPEX each year) and multiply that number by some multiple.  In the earliest days of private equity investing, multiples were often in […]

What Is A “Strategic” Buyer As Compared To A “Financial” Buyer? Does It Matter?

A strategic buyer is an operating company that wants to add your business to its business to drive its strategic objectives.  A “financial” buyer is a venture capitalist, private equity fund or family office (an investment vehicle for wealthy families).  What looks to be a “strategic” buyer may well be an operating business owned by […]

Margin Expansion Through Better Supply Chain Management

As your customers seek to expand their margins through better supply chain management, it’s not uncommon for the converter – whether an aerospace machining company, an injection molder, or a food processor – to get squeezed.  The financial impact can be significant.  Take the following example: OEM CUSTOMER negotiates with raw material SUPPLIER to secure […]

Be Very Careful With OEE and Utilization Metrics

When evaluating a manufacturing company, it’s easy to lean on metrics tied to machine utilization because they reveal both available capacity and whether a plant might be overstaffed.  Be very careful! OEE, utilization and similar metrics are sometimes deceiving.  They should measure how many hours in the day a machine is in production generating sales […]