MICHIGAN-BASED VEHICLE SEATING PRODUCT LINE
A Michigan-based manufacturer is offering for sale an OEM product line that has produced consistent sales and profits. The product is a federally-certified seating system component for a specialized market. A single customer currently accounts for steady year-over-year sales. The product offers untested potential for growth through marketing, particularly for a buyer with existing sales efforts in a related field. As the current owner moves to focus on other innovations, this product line is an excellent purchase opportunity for a manufacturer with existing capabilities in a related field or one looking to enter the vehicle seating field with a product that has steady sales and healthy margin.
Expanded Sales Through Marketing – A broader market has not been tapped; a company with an existing sales team could readily add this product to its marketing to reach new buyers.
Growth in Sales of Specialized Market – Current economic and demographic trends are driving record sales and projected growth in the end-product vehicles in which this product line is utilized.
Consistent Sales – This product is an essential component in the current sole customer’s production. Sales to that customer have been consistently strong the past five years.
Portable Turnkey Production – All tools, fixtures and process equipment for production are available and easily transported to the buyer’s facility. Production can be accommodated in as little as 2,500 square feet and with two dedicated employees. Vertical integration of component manufacturing of over $350,000 consisting of stamping, welding and roll formed components.
Limited Potential Competition – Tooling costs and product certification requirements present high barriers to entry for any would-be competitor in this limited market.
The product line consists of steady volume production with a 5-year average of approximately 8,150 units/year at roughly 700 per month. Nearly 100% of the sales are to one long-time sales channel within the RV seating industry. The product is a complex, high strength, tight tolerance mechanism with six axis articulation, which can be used as a valuable sales tool for value added work. Currently, the machining, welding, and roll-forming are outsourced, and the two dedicated employees provide value-add assembly at 0.46 hours per adjustor. Two operators can build, test, and pack 35+ units per 8-hour shift. All of the tooling is currently owned by the Company and is valued at approximately $1,000,000. Although not patented, the product line is protected because the tooling is owned by the Company, creating a high barrier to entry for a competitor. The product line also must pass three safety tests of the National Transportation Safety Board (NTSB).
2018 Product Line Forecast: $1,382,550
2018 Product Line Gross Profit Forecast: $481,111