Precision Engineering Company For Sale

Reference Number: HGH285

Location: South East UK

Turnover: £3.4m

Status: Offers Invited

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Business Summary

  • Outstanding opportunity to acquire a profitable, well established Precision Engineering company based in East Sussex, UK.
  • The company offers a complete development and manufacturing service capable of producing components from small quantities of prototypes through to 500+ batch size production.
  • Founded almost 40 years ago, the company has built up an enviable client base of blue chip companies in the Oil & Gas and industrial vacuum pump sectors as well as the MOD and some aerospace.
  • Kanban and buffer stock agreements are in place with key customers.
  • Repeat business accounts for over 85% of revenue.
  • The company offers a wide range of services including: prototype development and batch production, full CNC machining and turning, conventional machining, precision TIG Welding, mechanical and electrical assembly, leak flow testing, powder coating and bead blasting.
  • In addition, the company provides onsite support services in specialist inspection, cleaning, kitting, packaging and labeling.
  • The company has taken a consistent approach to investing in new equipment and training over the years which has resulted in a modern looking, well run manufacturing operation.
  • A strong Tier2 management team is in place and able to manage operations day-to-day.
  • The company has built a solid reputation for their quality control and management systems and is ISO 9001 Quality Management certified by BSI.
  • If customers require a rapid response time, the company can offer fast track facilities which are tailored to suit customer requirements.
  • The sale represents an excellent opportunity for a larger precision engineering group with a need to expand capacity or looking to grow into other niche markets, or for an investment group an opportunity to acquire a profitable business with minimal outstanding loans, management capability in place and a solid basis and market for growth.
  • There is sufficient capacity at the current site to enable potential sales revenue of £6m to £7m should both day and night shifts be fully staffed.

Services Provided

–       Prototype and production

–       CNC Milling

–       CNC Turning

–       Conventional Milling

–       Turning and grinding

–       TIG Welding

–       Mechanical and Electrical Assembly

–       Powdercoating

–       Leak Flow Testing

–       Bead Blasting

Employees

2 shareholding directors and 44 employees as follows:

  • 4 Tier 2 management team (Production, Sales, Quality and Accounts)
  • 4 Office staff (Quality and Admin)
  • 36 Operations staff

Premises

  • The company’s site comprises of three adjoining units one of which is owned by the company, and two of which are leased on 10 year terms.
  • Total equivalent rent: £115k. Rates: £36k.
  • Total area: 17,500 sq.ft operations + 1500 sq.ft. offices/mezzanine

Reason for sale

  • The vendors are happy to stay on as required for a handover period.

Financial overview

YE 31st Mar 2014 2015 2016 2017 2018
Forecast
Sales revenue £3,115,034 £3,540,451 £3,834,016 £3,109,245 £3,400,000
Gross profit £596,053 £789,206 £895,473 £661,639 £647,000
Percentage 19% 22% 23% 21% 19%
Adjusted EBITDA £170,441 £341,832 £413,081 £195,262 £235,000
Percentage 7% 11% 12% 8% 7%
  • Adjusted EBITDA takes account of the directors’ replacement costs and equivalent rent on the freehold property.
  • The company benefits from a strong balance sheet with minimal outstanding hire purchase and financial liabilities.
Offers Invited

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