Selling a Metal Manufacturing Business

Most metal manufacturing businesses sell based on a multiple of true cash flow, and the multiple moves with the shop’s risk profile. Buyers pay more for repeat releases, strong quote-versus-actual discipline, clean quality performance, and a believable plan for bottleneck equipment. Program concentration, outside processing dependency, and heavy overtime usually push value down unless you can explain it clearly. You can get a realistic estimate with Rejigg’s free valuation calculator, which adjusts for owner add-backs and compares to real transaction multiples.

No. Brokers typically charge 5–10% of the sale price for packaging, outreach, and process management that you can run yourself with the right structure. Rejigg gives you vetted buyer access, digital NDAs, direct owner-to-buyer messaging, and a built-in data room so you can sell without giving up a percentage. Start with the preparation guide, then list once your core documents are ready.

Most deals land in the 3–9 month range from “ready to list” to close, and the swing factor is usually diligence speed. Shops move faster when financials are clean and the owner can answer floor questions quickly on quoting misses, bottlenecks, quality escapes, and outside processing control. Deals drag when buyers are chasing missing documents or trying to understand capex and customer concentration risk. Rejigg speeds this up with digital NDAs and a secure due diligence checklist inside the data room.

Often yes, especially for smaller job shops and fab shops with consistent cash flow, clean books, and add-backs you can prove. SBA lenders will dig into customer concentration, big near-term equipment needs, and whether the shop relies on one estimator, programmer, or inspector. Before you get deep into negotiations, model the payment with the SBA loan calculator so you know what price and terms a lender is likely to support.

Have three years of financial statements and tax returns, plus a current year-to-date P&L. On the shop side, buyers commonly ask for a machine list, maintenance and service records, a tooling and fixture overview, sample job packets, quality certifications, and an outside processing vendor map with typical turn times. Putting this in a secure data room early reduces delays and keeps buyers from assuming gaps mean problems. Rejigg includes a built-in data room and a step-by-step prepare-to-sell guide.

Many deals use a working capital target, which is the agreed “normal” amount tied up in inventory, work-in-process, and receivables that should come with the business at closing. Metal shops get extra scrutiny because WIP (Work in Progress) can be hard to value when jobs are mid-routing or sitting at heat treat, and inventory counts can drift. Clean cycle counts, clear WIP status, and traceable certs reduce disputes. Rejigg’s data room helps you share counts and WIP reports securely during due diligence.

Buyers focus on whether equipment reliably produces shippable hours and protects customer delivery, not what it might bring at auction. A newer machine can still get discounted if it’s not tied to the shop’s real constraint, and an older machine can hold value if uptime is proven and service support is realistic. Expect questions about which part families depend on each line-stopper, how often it goes down, and what you do when it’s offline. A clear critical-equipment plan usually protects value better than an optimistic appraisal.

Seller financing is common in smaller manufacturing deals, especially when the buyer wants shared risk on customer retention or near-term performance. Earnouts, which are payments tied to future results, show up more when revenue is concentrated in a few programs or margins swing with mix and overtime. Push for plain-English terms: what gets measured, over what period, and what happens if the buyer changes pricing, staffing, or routing. Rejigg’s offer dashboard helps you compare offers on price, seller note, earnout, and timeline. See negotiation guidance.

Many buyers ask for 4–12 weeks of hands-on transition, then lighter support for a few months. The right length depends on where the risk sits. Quoting habits, programming standards, key customer contacts, and quality approvals usually matter more than general management. Buyers get comfortable faster when there’s a named backup for each critical role and the top repeat jobs have setup sheets and inspection plans that someone else can run. Rejigg helps you plan this in the transition guide.

Many shops run on purchase orders and blanket orders, not long-term contracts, so buyers look for practical proof the work will stick. That usually means release history, approved vendor status, customer scorecards, and qualification barriers like special process approvals or validated inspection methods. Buyers also ask whether any accounts require consent to move work to a new owner or legal entity. Before diligence, build a customer-by-customer summary of order patterns and approval requirements. Rejigg’s digital NDAs and staged data room access help you share this safely with vetted buyers. Start with finding the right buyer.

Taxes depend on how the deal is structured and how your business is set up. In metal manufacturing, buyers often prefer an asset sale because it lets them depreciate equipment and tooling, which can improve their after-tax return. Sellers often prefer a stock sale because it can be simpler and may reduce taxes, depending on the situation. Plan early with a CPA who has worked on manufacturing transactions because the difference can be material. Rejigg helps by keeping terms organized so your tax advisor can review the actual structure, not a messy email chain.

Non-competes are common because buyers don’t want a seller opening a competing shop and pulling key accounts or employees. The negotiation usually centers on geography, time period, and what “competing” means if the seller wants to keep doing engineering work or consulting. Enforceability varies by state, so don’t assume a template will hold. Rejigg’s deal tracking helps you compare offers that differ on non-compete scope and seller involvement. See negotiation guidance.

Confidentiality matters in metal manufacturing because prints, pricing, vendors, and customer lists are the business. A safer process starts with pre-vetted buyers, digital NDAs, and staged disclosure so sensitive documents only go to serious parties. Many owners wait to share customer names, detailed prints, and quoting templates until a buyer has shown real intent with a credible offer. Rejigg is built for this with buyer vetting, signed NDAs, and controlled document access in one place. Learn the approach in the buyer process guide.

The common friction points are messy financials, heavy program concentration, and unclear bottleneck risk where one aging machine gates most shipments. Buyers and lenders also get cautious when quality documentation is inconsistent, outside processing is loosely controlled, or the shop relies on one estimator, programmer, or inspector. None of these automatically kill a deal, but they push on price, terms, and timeline unless you can show clear mitigation. Rejigg’s preparation guide focuses on the documents and narratives that usually resolve these concerns.

Show concentration by program or part family, not just by customer name, because that’s usually where the real dependency lives. Include how long the work has been running, what keeps you qualified, how releases behave, and the signals you watch if volume starts fading. Buyers get more comfortable when they see scorecard history and proof you’re embedded with engineering and quality, not only purchasing. Rejigg’s data room makes it easy to share customer packets after NDAs are signed.

Before you sign an LOI, which is the buyer’s written offer outline, get clear on price, what’s included, how working capital will be handled, and whether there’s seller financing or an earnout. In metal manufacturing, also pressure-test the buyer’s plan for bottleneck equipment, outside processing approvals, and coverage for key people like the estimator, programmer, or lead inspector. Vague LOIs often turn into renegotiation later once diligence starts. Rejigg helps by tracking offers side-by-side and keeping terms visible in one dashboard. See how to negotiate.

You can reach serious buyers directly by listing where manufacturing buyers already look and running a structured, confidential process. The practical requirements are vetted buyers, NDAs, a secure data room, and a way to manage multiple conversations without losing track of who has seen what. Rejigg is built for that, and it’s free for sellers. You can start on the Rejigg homepage or talk through your situation via a consultation call.