How the Right Advisor Can Optimize the Sale Value of Your Fabricated Metal Business

How the Right Advisor Can Optimize the Sale Value of Your Fabricated Metal Business

How the Right Advisor Can Optimize the Sale Value of Your Fabricated Metal Business

January 31, 2024

The unassuming metal parts that power our lives originate from the fabricated metal industry, a sector shaping everything from soda cans to the cars we drive. But beneath the surface, a revolution is brewing. Automation, once the domain of giants, is now rattling the doors of family-owned shops, forcing a transformation that has reshaped the entire fabricated metal landscape. 

While it can feel daunting, that change also spells opportunity for owners looking to exit their metal fabrication businesses as well as larger firms looking to acquire the in-house fabrication capacity they need. 


A Shrinking Landscape, Growing Opportunities

Traditionally dominated by small, family-owned shops, the fabricated metal sector is undergoing a profound shift. Gone are the days when skilled hands alone guaranteed success. Today, scale and efficiency reign supreme, and larger firms with advanced automation are gobbling up market share and leaving smaller, manual shops scrambling. Just like the steel it shapes, the industry is being forged anew, with larger, regional, tech-savvy players emerging as dominant forces.

Amidst this industry transformation, business owners have plenty of opportunities to take advantage of higher multiples and stronger valuations of their firms, but there are also pitfalls to avoid. 

If you’re the owner of a smaller metal fabrication company, you’ve no doubt had the phone ringing off the hook with tempting-sounding offers. But falling prey to the siren song of the first offer and tempted by the promise of an easy exit, some owners are leaving money on the table. In fact, we estimate that- at best- there’s about a 90% chance of the phone offer being the wrong choice for your business. While accepting the easy offer may seem tempting, you’re likely leaving money on the table.  


Trust the Process

At NuVescor, we’ve witnessed firsthand the pain of rushed exit strategies. We believe the key to a successful sale lies in a process that helps business owners identify the strengths and weaknesses of their firms, take proactive steps to improve their marketability, and identify the right buyer (not just the first one):  

  • Prepare your business for the future: The companies seeing the highest multiples are those that buyers assess as having the greatest potential. In this market, which means businesses that are some ways through the automation process, have a diversified client base, and have contracts that will continue beyond the sale date. Buyers also want to see the capacity for growth, so it’s important that you don’t put improvement plans on hold or max out your capacity while waiting for offers. 
  • Find the right buyer: While there are plenty of buyers right now, not all of them will be right for your business. Taking steps to Identify a buyer that aligns with your vision will maximize your return. 
  • Strike the perfect deal: The goal is to negotiate terms that protect your interests, whether it’s a structured sale, earn-out, or all-cash deal. The advantage of working with advisors is that we understand the nuances of the deal opportunities and can help translate that knowledge into optimal outcomes for you. 

The fabricated metal industry is evolving. And selling your metal fabrication business can be a rewarding journey. With the right knowledge and guidance, you can forge a deal that shines as brightly as your craftsmanship.


How NuVescor Can Help

We’ve helped numerous fabricated metal businesses leverage their strengths to achieve remarkable growth and secure lucrative exits. We handle everything from valuation and buyer identification to discreet negotiations and seamless deal closure so you can focus on your well-earned retirement or next venture. 

Ready to seize the opportunities? Contact NuVescor today. 

Three Important Aspects of Succession Planning

Three Important Aspects of Succession Planning

Three Important Aspects
of Succession Planning

A significant number of business owners find themselves without a robust succession plan. Many feel overwhelmed by the process, distracted by the daily challenges of running a business, or think it’s too early to begin planning their exit strategy. The truth is that all businesses need a plan for the future. Exit planning is key to this process and, drawing on our years of experience with clients in this situation, we’ve developed some tips for three aspects of succession planning to help you better anticipate and shape the future of your business.

Create Your Vision

What do you want for the future of your business? Be honest. How long do you intend to stay on? What are your financial goals after you leave? Do you need to consider your retirement funds, investments, or any other financial aspects of handing over control to a successor? These queries can help you get specific:

  • Do you want to keep your business or sell it?
  • Do you want the business to remain in the family?
  • Are there any concerns or feuds over the selection of a new leader?
  • What will happen to the business if it is sold?

You don’t have to be wedded to the goals you set. The idea is simply to begin cultivating a vision of your ideal future so that you can begin shaping your daily operations in service of that vision.

Identify Potential Successors

Who might take over your business if you leave? For family-owned businesses, the answer is often a family member. This is fine, but it’s important to weigh that person’s willingness and ability to run the business when you leave. Now might be the right time to consider mentorship programs, training initiatives, or other strategies to ensure your chosen successor is prepared to step into the role.

Working with an exit advisor can also help you to develop a well-run process for choosing your successor. Typically, an exit advisor serves as a strategic partner, guiding you through every step of the succession planning process, from assessing the business to goal setting and valuation planning. Their goal is to ensure you maximize value and achieve a successful transition. No matter whom you choose for your successor, be sure to evaluate them on skills such as:

  • Having the ability to make key decisions
  • Team-building and interpersonal skills.
  • Self-direction
  • A shared vision for your business’s future
  • Flexibility and adaptability
  • Thoughtfulness and a willingness to innovate
  • The ability to be an inspirational leader, not a micromanager

If you intend to sell, consider how to help your business be a more attractive target for investors. Can you think of competitors who might be interested, or others with the skills necessary to operate your company? Begin growing the business with these potential successors in mind.

Make a Contingency Plan

Preparation is a cornerstone of success. So, the third step in any contingency plan is anticipating anything that could go wrong. What will happen if there is a sudden crisis in the market? What if your intended successor loses interest or no longer has the financial wherewithal to take on the business? Much of your contingency plan is about getting the right people on your team—exceptional managers and skilled staff—who can run the business in your absence, and gently help it navigate a crisis. If you’re unsure where to begin, consider working with a succession planner. They can help you consider issues you might not otherwise think about, discuss how various exit plans could affect your finances, and help you set reasonable expectations about your business’s final value when you do decide to exit.

About NuVescor Mergers & Acquisitions

At NuVescor, we align the interests of investors and business owners to enable our clients’ personal and financial goals. For over a decade, we have helped founders and owners of companies in the manufacturing sectors achieve maximum value for their companies. Together, we can provide business valuations, financial analysis, investment guidance, and business transaction advice for middle-market companies with revenues from $5 million to $50 million. Contact us today to speak with one of our experts.


This blog was originally published in October 2020 and newly updated in December 2023.

Sell-Side Negotiation Tips from M&A Advisors

Sell-Side Negotiation Tips from M&A Advisors

Sell-Side Negotiation Tips from M&A Advisors

Skillful negotiations can make or break M&A transactions. No matter how well things appear to be going, it can all fall apart at the negotiation table. But, skilled negotiators can ensure that both parties get the most out of the transaction and minimize potential pitfalls or risks. For negotiations to end successfully, the buyer and seller must be committed to specific, clear, and productive discussions, not allowing emotions to jeopardize their hard work.

For those new to selling a business as an exit strategy, navigating negotiations can be challenging, and the negotiation table may seem to have potential pitfalls lurking at every turn. The key? If you’re selling your business, be prepared to meet possible challenges and embrace the art of compromise.

Drawing on our years of negotiation experience, we’ve pulled together a roadmap with practical steps to help you get the most out of the deal.

Pre-Negotiation Prep Work

Preparing for negotiations is essential. Use this time to think about the deal, what you want to get out of it, how you see the business continuing after the sale, and getting clear on your position. Some things to think about include:

  • Establish your non-negotiables: Well before you sit down at the negotiation table, work with your team of M&A advisors to establish the areas that are non-negotiable in a successful deal. The list might include preserving your business’s positive brand image and values, job security for employees, maintaining service levels for customers, and any post-sale involvement consultancy or other role you wish to have.
  • Research your buyer: Though due diligence is typically the buyer’s job, you should also be well-prepared. Do your homework so you can understand your buyer’s likely concerns, giving you a chance to acknowledge and address them early in the process. Ensure they have a good reputation by talking to previously acquired businesses’ owners. Investigate the integrations’ success and whether the buyer keeps their promises. Above all, make sure the buyer can finance the deal and complete the sale. Otherwise, you can end up wasting a lot of time on a deal that will inevitably fail.
  • Establish a clear negotiation calendar: Set a viable, realistic timeline for key negotiations and transaction goals. Decide on key discussion topics ahead of time to keep your negotiations, and the transaction they support, on track.
  • Draw up some ground rules: It’s also wise to draw up some ground rules before you reach an impasse. Then, when there’s a disagreement, you can lean on the guidelines you’ve already agreed on.
  • Get your staff on your side: It’s taken you years to build your business, and your staff may feel like part of the family. This means there may be a lot at stake. While you can’t discuss confidential details, it’s best to share what you can with your staff as soon as you’re able to help them adjust and support the business through negotiations and sale.

Strategies for Negotiation Game Day

When you finally sit down at the negotiation table, some simple strategies can help you make the most of your time:

  • Don’t sacrifice anything for nothing. You can’t win every battle, but don’t make concessions for no reason. You should never give something up without getting something in return. Even if it’s a small matter, a this-for-that approach is always best.
  • Move strategically. Each round of negotiations should move your interests forward—not serve as a dumping ground for emotions or disputes. Reviewing the items you have agreed to gets you on the same page and keeps the negotiations positive.
  • Know when to walk away. Negotiations that drag on for weeks and go nowhere benefit no one. Don’t waste time. You don’t have to complete the deal simply because you’ve already invested time and energy. This impulse to complete the deal at all costs can catapult you to failure.


Experience and Objectivity Win

M&A negotiations can be intense. Seller and buyer emotions often color the process, causing it to drag on and be less productive than it could otherwise be. You should be prepared for some emotional turmoil, so work hard to maintain your objectivity. An M&A advisor can help keep the negotiations moving forward by focusing on the pros and cons of each negotiated point, looking at the overall deal picture, and acting as. a buffer for emotional reactions. Experience plays a pivotal role in negotiation success, and a skilled M&A advisor is worth their weight in gold. They can keep you focused on the ultimate goal, let you know what’s reasonable and what’s not, and take much of the burden of negotiations off your shoulders.


Preparation for a Successful Transaction

Before the team at NuVescor Group brings a company to market, we work with them to identify synergistic market opportunities. We then take that information and survey the market to find buyers who can take advantage of those opportunities. This meticulous process allows clients to achieve multiples higher than the standard valuation methods suggest. Our process minimizes the risk of bringing a business to market when value expectations cannot be met and enhances the chances of finding the right buyer, ultimately facilitating a successful deal. 

This article was originally published on April 24, 2021 and newly updated on December 19, 2023.

Post-Integration Manufacturing M&A Planning: Getting the Most from the Deal

Post-Integration Manufacturing M&A Planning: Getting the Most from the Deal

The world of manufacturing investment banking tends to focus on everything that comes before the deal: regulatory snafus, final sale price, and the challenges of inertia. But for most companies, success unfolds during the post-merger integration, after the deal is sealed. This success relies on careful planning to ensure the deal realizes its promised value and maximizes time, effort, and talent.

Here are five strategies to ensure that, when the deal closes, you can capitalize on the opportunities and steer clear of potential pitfalls:

Identify and Understand Value Drivers

Start with what creates value for your business. Identify all the ways your business creates value and make a clear plan to succeed on each front. It’s not enough to simply point to potential sources of value. You must have reliable metrics for determining how much these value drivers are worth and how your business intends to drive that value higher. It’s good practice to prepare backup plans and be ready to adapt quickly should market or other factors change.

Know the Importance of Governance Structure

If you’re merging two companies with distinct cultural and operational differences, you’ll need to establish a new governance structure that helps expedite integration and reduces the risk of value dilution. Instead of creating functional teams, try defining cross-functional value-creation groups and focusing on solutions that address multiple functions. Start building your governance structure early in the process. Planning ahead will help ensure a smooth integration of operations and safeguard the value of your business.

Make a Diligence “Clean Room”

During the due diligence phase before closing a deal, having timely access to necessary data is critical. Delays can cause the deal to lose momentum. If you can’t produce the data a buyer needs, they may begin to lose interest. Using a “clean room”, where a neutral third-party vendor or individuals without conflicts of interest share data between the parties, can help you expedite the process. This not only accelerates due diligence but can also help with assessing future synergies and cost savings—a key consideration for integration planning.

Design a Detailed Operating Model for the Value Chain

You must have a deep and complete understanding of both company’s current people, systems, processes, and assets. This is the foundation upon which the team will build the new business, leveraging the respective strengths of each original company. The changes you make to the operating model depend on the type of deal and its goals. A small tuck-in may not require dramatic changes. A transformative deal, by contrast, presents the opportunity to implement sweeping reforms that increase value.

Pay Attention to Company Culture

Culture is an often overlooked element in the deal, and it’s the one that’s most likely to send the deal awry. Shifts in corporate demographics, management style, requirements, benefits, and more can be real challenges for your workforce—which in turn can create serious challenges for the business. The unspoken dynamics—who holds the power, who makes decisions, and how employees are treated—carry immense weight. So, acknowledge these differences openly and find ways to bridge these gaps.

Post-merger success hinges on a seamless integration of two businesses. You’ll need astute planning, foresight, a deep understanding of the two cultures, and the ability to adapt swiftly. Whether you’re in the midst of a merger or contemplating one, NuVescor can help you with integration planning. Contact us to learn more about how we can help you negotiate a successful deal for you and your business.

This blog was originally published in May 2021 and newly updated in November 2023.

5 Tips to Help the Acquirer of Your Manufacturing Business Succeed

5 Tips to Help the Acquirer of Your Manufacturing Business Succeed

5 Tips to Help the Acquirer of Your Manufacturing Business Succeed

As you move toward closing the sale of your business, it can also be a very stressful time for your buyer as the reality of running a new business draws near. Here are five ways you can help your buyer feel more comfortable and transition to ownership successfully.

Hand Over the Right Information

As you approach closing, give the buyer a list of all service providers that are crucial to your business operations. These providers may be able to offer the buyer better terms for business insurance, payroll, banking, employee benefits, or 401Ks because they already have a deep understanding of the business.

Introduce the Staff

Your team trusts you and has been the backbone of your success. Introducing your team to the buyer, gives them the opportunity to ease any concerns and build trust in the new leadership.. Work out a communication plan that fosters positive interactions and allows your team and the buyer to establish a rapport.

Take Ego Out of It

It’s natural to feel attached to the business you’ve nurtured for decades. You may believe no one else can run your company quite as well as you can. You may be right. However, letting go means letting the new owner take the reins without interference.

Resist the urge to micromanage or criticize their decisions. Instead, support the buyer and encourage a positive atmosphere among your team. Encourage stakeholders to direct any questions to the new owners. Your ego has no place in a sale.

Introduce the Customers

Your loyal customer base can be a valuable asset, but you need to make sure that loyalty to the business continues even when you step back. Gradually educate customers about the sale, and be sure to communicate openly about the benefits they can expect. Let them know what’s in it for them.

Use your credibility with customers to foster trust in the new owner, assuring them that you believe in the sale. . By strategically managing this transition, you’ll safeguard the long-term survival of the business you have built.

Share Cultural Knowledge

Each business has its own unique culture. These soft elements of a company can be hard to quantify or describe, but sharing core values, traditions, and practices can help the buyer understand this vital aspect of your business. . Talk openly with the buyer about your company culture—what makes it different, what’s important to stakeholders, and why you believe your company has thrived. Then, encourage the buyer to build on that culture to grow the company further.

At NuVescor, we’ve helped many business owners navigate the exit from their business, and we’ve gleaned these tips from our years of experience. Contact us to learn more about how we can help you secure your financial future and your company’s legacy as you move to your next chapter.

This article was originally published on June 4, 2021 and newly updated on November 15, 2023.