Detroit-Area Metal-Coating Company Sold to Investors

Detroit-Area Metal-Coating Company Sold to Investors

by | Jan 12, 2023

Detroit-Area Metal-Coating Company Sold to Investors

GRAND RAPIDS, MI – Dec. 15, 2022

NuVescor Group is pleased to announce the successful sale of a Detroit-area metal coating and cleaning services company.

The diversified metal-coating company provides innovative thin-film coating technology, service and equipment to the metal removal and metal forming industries. The Company’s technology provides improved productivity and performance in a variety of products for the medical and aerospace industries, as well as many applications involving the manufacturing of industrial components. 

The two individual buyers are looking to grow and expand the business.

 

About NuVescor Group

NuVescor Group, based in the Midwest, is a distinguished mergers & acquisitions service company that has served the manufacturing industry since 2007. The employees of NuVescor possess the full array of disciplines needed to complete successful and timely business transactions. NuVescor utilizes a proprietary proven process that greatly increases the success rates for business transactions as well as the customer experience. For more information about NuVescor, visit www.nuvescor.com.

Trends to Watch in Manufacturing M&A in 2022

Trends to Watch in Manufacturing M&A in 2022

by | Jan 4, 2022

Manufacturing M&A stands to continue its boom in 2022, especially for companies with strong offerings and a rosy outlook that have managed the pandemic well. Understanding these key M&A trends can help you work with a business broker to successfully market and sell your manufacturing company this year.

The Current Manufacturing M&A Environment: A Primer

Manufacturing M&A is very robust right now, in spite of the interruptions other sectors of the economy have seen thanks to COVID generally and Delta and Omicron specifically. Deal flow has increased each quarter, with closings peaking in December. Current deal pipelines suggest this trend will continue at least into 2022, and possibly beyond.

In the earliest days of this boom, dealmakers were very optimistic about a return to pre-COVID business, thanks to vaccines. Low interest rates, high liquidity, and plenty of dry powder played a big role in this optimism. Even as COVID rips through the globe and optimism about vaccines wanes, PE firms remain committed to deploying capital, especially to new and established middle market companies in thriving industries. PE firms are also increasingly interested in minority investment deals, where in the past they only showed interest in buyouts. PE deals may comprise as much as 40% of all M&A activity, so catering to PE is a key strategy for successfully selling any business.

Similarly, strategic buyers are accumulating large cash stockpiles, and continue to aggressively pursue new opportunities. Lower interest rates make debt financing more accessible and attractive, enabling buyers to manage even restrictive lending standards.

The increase in SPAC activity has also increased access to public markets, and the liquidity these markets offer. Regulatory oversight has dampened SPAC enthusiasm, but SPACs will continue to play a role in many deals in 2022.

Challenges to Manufacturing M&A in the Coming Year

COVID continues to be a concern, especially with uncertainty looming about the effects of the Omicron variant. Companies that struggled during COVID may face increased uncertainty as well as additional scrutiny from buyers. Increases in the corporate and capital gains tax rates continue to pose a problem, as does inflation.

The more aggressive U.S. antitrust environment under the current administration could hinder certain deals, especially hose affecting larger companies.

Trends in M&A for the Coming Year

It remains a seller’s market, with highly competitive markets and sellers enjoying tons of leverage. PE buyers and strategic acquirers must both be aggressive to win bids. Buyers must be willing to shoulder most post-closing risks, especially in the most competitive sectors.

This doesn’t mean that every sale is a slam dunk, though. Sellers must get their books in order, prepare for due diligence, and stand ready to compete. The market is best for sellers with thriving businesses, so the more you can do to prepare your business now, the higher the ultimate sale price is likely to be.

Manufacturing M&A Outlook for 2022

Manufacturing M&A Outlook for 2022

by | Jan 4, 2022

We are rapidly approaching the two-year anniversary of the COVID-19 pandemic’s arrival on American shores, though to many it feels like it’s been a lot longer—thanks to a plot that keeps repeating itself. Americans trapped at home continue to purchase like never before, overloading an already struggling logistics infrastructure. So what should manufacturers expect in the coming year? Just like COVID, the central themes of prior years are not going away. These are the manufacturing trends we’re watching as we head into the new year.

High Demand, High Barriers

While preliminary signs suggest that supply chain issues may be easing in the United States, the issue has proven quite severe, so don’t expect full relief any time soon. The sales manufacturers couldn’t complete last year may still be difficult this year—and may even go away. However, the M&A market continues to be flush with high demand. Pricing power remains high, too, thanks to high demand for supplies and services.

A Rebounding Market

The aerospace sector is still struggling, but everywhere else industrial businesses are approaching or even exceeding pre-pandemic sales levels. Forecasts suggest that manufacturing will experience more than just the typical recovery. The pressure of COVID has forced many companies to re-evaluate their operations, encouraging them to partner with factories closer to home. Consequently, there have been a number of blockbuster North American factory announcements in the electric vehicle and semiconductor markets. Other markets may soon see similar changes. The spending is spreading, and this will probably continue.

Emerging Trends

Some other trends we’re seeing include:

  • The need for more capacity to keep up with companies’ projected growth. This may lead to an increase in capital spending.
  • A push toward carbon neutrality. Going green isn’t cheap, but it can confer numerous benefits to companies that can afford it.
  • A tight labor market. Wages are rising, and it’s increasingly difficult to fill roles. We may see both more automation and increased labor costs.
  • The effects of inflation. Manufacturers tend to outperform other sectors during times of high inflation.
  • Choosier investors. Investors are keenly aware of the effects of the COVID-19 pandemic, and will be assessing how a company adapted during the pandemic, as well as how the crisis affects a company’s long-term outlook.

As always, one factor remains consistent. Companies with consistent high earnings, well-run operations, and a coherent, profitable plan for the future stand to thrive in the coming years, positioning them well for lucrative M&A deals.

FabX Industries Inc. acquires Guide Engineering LLC

FabX Industries Inc. acquires Guide Engineering LLC

by | Dec 15, 2020

FabX Industries Inc. acquires
Guide Engineering LLC

GRAND RAPIDS, MI  – NuVescor Group is pleased to announce the successful sale of Guide Engineering LLC of Fort Wayne, Ind., to FabX Industries Inc. of Greenville, Mich.

Guide Engineering designs and builds high-end automation, assembly and test systems, including robotics, primarily serving automotive manufacturers. FabX Industries is a manufacturing holdings company which provides high-quality, cost-effective and value-added machining and fabrication services for the fenestration, automotive, marine, furniture and recreational vehicle industries. Before the acquisition, FabX consisted of Aquest Machining and LaserTec Sheet Metal Fab, both of Greenville, and Elite Precision Machining of Kalamazoo.

Since the acquisition, which was effective Oct. 31, Gopi Ganta has assumed the CEO role at Guide Engineering. His experience is in the engineering, operational and financial sides of business.

Ganta said FabX was interested in Guide Engineering because of synergies between the companies, the experience and skills of Guide Engineering employees and the overall trend toward increased demand for automation among U.S. manufacturers. He and the management team at FabX will bring strategic and business development experience to help diversify and grow the Indiana company, whose capabilities extend far beyond its current automotive focus.

“I’m really excited to be working with Guide Engineering,” Ganta said. “With my engineering background, I can provide strategic direction for Guide to pursue opportunities outside of the automotive field.”

He noted that FabX can supply machine components to Guide Engineering to improve its quality and service. FabX also can develop automated and robotic systems to manufacture certain marine industry components. FabX also is an ISO 9001-certified company.

Guide Engineering President and former co-owner Scott Taylor agreed that the partnership will allow for many synergies in transferable opportunities and for the continued growth of Guide Engineering.

Taylor said his partners at Guide Engineering, Andy and Lisa Zundel, will step aside as they enter their well-deserved retirement years. Taylor will continue as president of Guide over the next several years. All Guide Engineering’s employees will remain on staff with no changes in the Company’s core business model, other than pursuing opportunities to diversify in the automation market.

Ganta confirmed that current Guide Engineering staff will remain, and design and control engineering positions will be added.

Guide Engineering will continue to operate under its current name. In a memo to customers and suppliers, Taylor said: “Please take note that we will operate on business as normal with no interruptions to each of you. Our objective is to continue promoting the same expertise, competitiveness, quality, and support as you have come to expect. We look forward to the years to come as we continue our relationship and partnerships.”

Guide Engineering was established in 1960 as a design-only Company and expanded in the 1970s to produce single-use special machines. From 1980 to 2000, the Company expanded its focus again to include small assembly cells. Since 2000, the Company has continued to grow as a high-end assembly and automation systems integrator. Guide Engineering has been at the forefront of changing technology, both in the electro-mechanical product realm and in software development. Investment, recruiting and development of a skilled workforce has enabled it to evolve over time to produce larger and more complex systems, including robotics.

About FabX Industries Inc.
FabX Industries, of Greenville, Mich., is a manufacturing holdings company established to provide high-quality, cost-effective and value-added machining and fabrication services for the fenestration, automotive, marine, furniture and recreational vehicle industries. Before the acquisition, FabX consisted of Aquest Machining and LaserTec Sheet Metal Fab, both of Greenville, and Elite Precision Machining of Kalamazoo.

About Guide Engineering LLC
Guide Engineering LLC has been a leader in the design and manufacture of automation, assembly and test systems, including robotics, primarily serving automotive manufacturers for more than 50 years. Based in Fort Wayne, Ind., the Company was founded in 1960. The Company has distinguished itself with a highly skilled workforce applying cutting edge technology.

About NuVescor Group
NuVescor Group, based in West Michigan, is a distinguished mergers & acquisitions service provider that partners with other professional service providers to provide the full array of disciplines needed to have successful and timely business transactions. NuVescor utilizes a proprietary proven process that greatly increases the success rates for business transactions as well as the customer experience. For additional information, please visit www.nuvescor.com.