An In-Depth Guide to Selling a Manufacturing Business (+ Info on Navigating New Tariffs)

When you’re selling your manufacturing business, you will have specific exit outcomes in mind, including:

• Your sale price: This is the price you need to finance the next stage of your life, whether that’s starting another venture or retirement.
• Your exit timeline: This involves your ideal exit date — the date you want to have sold your business.
• What happens to your business after you sell it: This includes what happens to your employees, your customers, and your overall legacy.

But according to the Harvard Business Review, 70–90% of deals don’t bring owners their ideal exit, in terms of sale price, timeline, and stewardship. There are several reasons for this, including valuation misalignments, unrealistic goals, and a volatile market.

As the owner of a manufacturing company, several factors can cause buyers to lower their offers, including:

• The rising cost of materials: A 2025 Deloitte industry outlook shows that a 2.7% increase in raw materials and input costs is predicted next year.
• A shrinking workforce: In the same industry outlook, an estimated 1.9 million manufacturing jobs could go unfilled in the next year. Retiring workers + lack of new talent means a business must demonstrate how a buyer can maintain production levels.
• Uncertainty around tariffs: New tariffs can drive down your valuation, as it now costs more for your manufacturing business to operate. Axial talked to several experts in the industry on how they’re advising manufacturing companies to navigate tariffs. For example, according to data from the Peterson Institute for International Economics, companies with China-dependent supply chains are facing on average 51.1% tariffs on 100% of goods. Buyers are going to price that extra cost into the deal.

These challenges can stop you from achieving your ideal exit and even derail the deal completely.

In this post, we take a deep dive into how to sell your manufacturing business in a way that increases your chances of getting the exit you want.

Specifically, we look at:

How to Value a Manufacturing Business

• Understanding EBITDA Multiples for Manufacturing Companies
• Valuation Methods to Arrive at Your Most Accurate Multiple
• Factors that Drive a Manufacturing Company’s Value
• How Tariffs Can Affect Multiples for Manufacturing Companies
• How to Mitigate Decreased Valuations and Stalled Deals Due to Tariffs

Preparing Your Business for Sale

• Know Your Exit Goals
• Prepare for Due Diligence
• Prepare All Relevant Legal Documents
• Remove Operational Gaps and Key Person Dependencies

Optimize Your Customer Contracts to Show Reliable, Recurring Revenue

• How to Address Supply Chain Vulnerabilities and Show Operational Resilience

Marketing Your Business and Increasing Buyer Coverage

• How Your M&A Advisor Will Evaluate Buyers

Negotiation, Structuring, and Closing the Deal
How to Find the Best M&A Advisor for Your Manufacturing Business
Additional Resources for Owners Looking to Sell Their Business
Frequently Asked Questions

How to Value a Manufacturing Business

An accurate valuation is essential before taking your business to market. Knowing its worth helps you decide if it’s the right time to sell.

The value of your manufacturing company is made up of several factors (we have a full list down below), including:

• Capacity utilization: You’ll generally receive higher valuation if you have higher capacity utilization rates. Higher capacity utilization rates demonstrate operational efficiency and strong market demand — it signals the security of recurring revenue and the potential to scale operations.
• Supply chain dependencies and tariff exposure: The tariff economy is currently unstable. Current US tariffs on Chinese imports average 51.1 percent and cover 100 percent of all goods, with manufacturing companies facing some of the highest exposure under proposed tariff policies. While tariff-exposed manufacturers face valuation challenges, companies with advanced automation, proprietary technology, and domestic or reshored supply chains command premium valuations. Buyers particularly value manufacturers with Industrial Internet of Things (IIoT) capabilities, robotics integration, and high intellectual property content that creates competitive moats.
• Customer concentration risk: The higher your customer concentration, the more risk a buyer takes when buying your business. If one customer is responsible for 25% of your business, buyers may discount their valuation of your company. This is due to added risk — if that customer leaves after your exit, the new owners just lost 25% of their expected revenue.
• Working capital requirements: Manufacturing businesses with higher working capital needs often receive less cash at closing, with buyers structuring deals using more seller financing or earnout provisions to preserve their own cash for ongoing operations.

All these factors (and more) go into your company’s value, which will be expressed as a multiple of earnings. Below, we look at how EBITDA multiples work, and then we cover valuation methods used to triangulate the most accurate multiple for your company.

Understanding EBITDA Multiples for Manufacturing Companies

The value of your manufacturing company will be expressed as a multiple of your EBITDA.

EBITDA represents your earnings before interest, taxes, depreciation, and amortization. This metric offers potential buyers a clear snapshot of your business’s core profitability, free from the effects of taxes, financing, and non-operational factors. EBITDA helps buyers gauge cash flow, assess whether your company is suitable for a debt-financed transaction, and compare it more easily to other businesses.

So if your EBITDA is $7 million and you have a multiple of 3x, that means your business is valued at $21 million.

But how do you figure out the right EBITDA multiple for your manufacturing company? There’s a lot of data out there on average EBITDA multiples, but they range drastically from one source to another. One survey shows EBITDA multiples can range from 2.6x to 16x+. Another shows the average is between 5x and 8x. Your multiple depends on your specific business and what’s driving your value.

To get your most accurate valuation range and EBITDA multiple, you want to work with an M&A advisor who has experience in selling companies like yours. They’ll know first-hand what buyers are willing to pay, and they’ll use various valuation methods to conduct an accurate and comprehensive valuation of your company.

If you’re ready to get an accurate valuation of your business, schedule your free Exit Consultation with Axial. After learning about your company, we can recommend 3-5 M&A advisors with experience in valuing and selling companies like yours.

Valuation Methods to Arrive at Your Most Accurate Multiple

Here’s a brief breakdown of the valuation methods M&A advisors will use to value your company:

1. Discounted Cash Flow (DCF) Analysis

This method estimates the value of your manufacturing business based on projected future cash flows. Manufacturing companies face distinct financial challenges, with economic cycles, raw material price volatility, and capacity utilization fluctuations being primary concerns.

Your M&A advisor can determine appropriate growth and discount rates based on their experience with recent manufacturing acquisitions.

2. Precedent Transaction Analysis

This method estimates the value of your business based on the purchase prices of similar, recently closed deals, which may include transactions your advisor has facilitated for other manufacturing owners.

Using these valuation methods, your advisor can determine an accurate range of what your manufacturing company could realistically sell for.

You might see a breakdown like this:

• Discounted Cash Flow Analysis: 4.5x EBITDA
• Precedent Transactions Analysis: 6.2x EBITDA

This represents the EBITDA multiple range for your business, indicating you can expect a sale price between 4.5x and 6.2x your EBITDA.

But keep in mind that this initial valuation range serves as a starting point for eventual pricing negotiations with interested buyers. The final price paid for your business will often differ from this initial valuation. Factors like market conditions, deal structure (e.g., less cash upfront in exchange for a higher offer), and whether you’re retaining any ownership stake in the business (either yourself or your employees) will all play a role in determining the final price.

Learn more in Axial’s post on how to value a company for sale.

Factors that Drive a Manufacturing Company’s Value

As a business owner, it’s good to know which factors drive your company’s value — even if you’re not the one conducting valuation analyses. This lets you decide how you can better maximize value leading up to the sale.

Here, an M&A advisor is invaluable. They understand what buyers look for when acquiring a company, and they can view your company through this lens and offer specific insight into what drives value.

For example, you might think that investing in the latest, most expensive equipment will automatically increase your company’s value. But some buyers might actually be concerned about the high depreciation costs and whether the equipment was necessary for current production levels. Instead of adding value, that recent capital expenditure now reduces your company’s cash position and raises questions about capital allocation decisions.

Instead of making such a purchase, an experienced M&A advisor might guide you to focus on demonstrating consistent equipment maintenance, optimizing utilization rates, and showing how existing equipment supports scalable production — factors that often drive more buyer interest.

Here is a table of 13 of the most common factors that drive value for manufacturing companies:

How Tariffs Can Affect Multiples for Manufacturing Companies

Roughly 40% of surveyed firms anticipate double-digit increases in product input costs due to tariffs. That could translate to buyers valuing your business lower, as now it’ll cost more to run your company.

How much tariffs will affect your valuation will depend on:

• If your supply chain relies heavily on tariffed countries (like China)
• How much the newly implemented tariffs will affect your price
• Whether or not your competitors are equally affected
  • Within the Axial network, we had a deal go through where the company had significant tariff exposure due to 100% of its goods coming from Asia. However, the PE firm making the purchase didn’t hesitate to close the deal because everyone in this specific industry sourced from Asia. That means the risk imposed by the tariffs is hitting the entire industry.

How to Mitigate Decreased Valuations and Stalled Deals Due to Tariffs

If you want to sell your manufacturing company in the near future while still maximizing your exit outcomes, there are several things you can do to reduce the chance of getting a lower valuation, including:

• Outlining your supplier diversification strategy: If you’re working on diversifying your suppliers, make sure your plan is documented and can be shared with buyers. Even if the plan is in progress, it’s good to show buyers your business can diversify its suppliers.
• Quantify the impacts of tariffs on your EBITDA: This means identifying which imported materials/products are subject to tariffs and knowing the exact percentage of increased costs due to tariffs. With this uncertain market, you can also contextualize your value by showing historical EBITDA (pre-tariff performance), current EBITDA, adjusted EBITDA (what your EBITDA would be without the new tariffs), and projected EBITDA that shows value based on several different scenarios.
• Demonstrate how you can use pricing to protect your margins: If tariffs are increasing your costs, then present a plan on how you can use pricing power to offset those costs.
• Exploring alternative exit structures: You can consider different exit structures, such as seller financing or writing earnouts into the agreement. Both of these work to help keep the deal on track and compensate the buyer in the face of uncertainty.

These are just some general, high-level ideas on how to mitigate decreased valuations and stalled deals due to tariffs. Your specific strategy will depend on your business and your exit goals (including timeline, stewardship, and price).

From here, you have several options:

• If you’re ready to value your manufacturing business for sale and start the M&A process, schedule your free exit consultation. We will pair you with an Exit Consultant who will learn about your business and exit goals and introduce you to a shortlist of 3-5 experienced M&A advisors. We will then help you interview each advisor and pick the right one for your company.

• If you’re not yet ready to speak to an M&A advisor, you can also use our free business valuation calculator. This won’t give you a market-ready valuation – nor will the calculator replace an M&A advisor who helps you craft marketing materials, target buyers, and more – but it does give you a good ballpark of your company’s value using an industry-specific DCF methodology.

• If you want to keep learning about the M&A process and how to sell your business, you can continue to read on below. This guide covers preparing your business for sale, marketing your business and finding buyers, structuring and closing the deal.

Preparing Your Business for Sale

Next, we’re looking at the things you can do before hiring an M&A advisor. The better prepared you are for your exit, the easier it will be to go to market.

When we surveyed investment banks on why deals often fall through, we learned that the majority of owners are not fully prepared to sell their business, are missing key documents, and have unrealistic expectations.

But setting goals from the beginning and knowing what information you need to present can really help your sale go through.

Know Your Exit Goals

Knowing what you want from your exit will help you figure out if it’s the right time to sell.

Your exit goals are made up of your ideal sale price, exit timeline, and what you want to happen to your business and its employees after your exit. Ask yourself questions such as:

• What do I need financially to support myself and my loved ones after my exit? Knowing your number helps you decide if it’s the right time to sell. For example, if your advisor’s valuation range doesn’t match your ideal sale price, then the advisor can make pointed recommendations on what changes you can implement to maximize value.
• What will I do with my free time after I sell my business? This is a big consideration for manufacturing owners, as you’re likely spending significant time managing complex operations, supply chains, and quality control processes.
• How long do I want to stay on after the sale? Most exits will require a transition period, where the owner stays on for several months to assist with the exchange of control. It’s particularly important in manufacturing given the technical complexity and established supplier relationships.
• What do I want to happen to my manufacturing business, its employees, and current customers? There’s often a spectrum between price and stewardship, where the more you get of one, the less you get of the other.

While an M&A advisor will work to help you achieve your ideal exit, it’s a good idea to know how you prioritize these goals. For example, if the main motivation for selling your manufacturing business is to fund your retirement, then you may be willing to sacrifice on stewardship if it means getting a more competitive price.

Prepare for Due Diligence

A key part of exit preparation is preparing your business for due diligence. Due diligence is when an interested buyer looks at your financials and operations to understand your company’s value clearly. The better prepared you are, the less likely there’ll be a valuation misalignment, stalled deal, or a deal that goes completely off the rails.

Most manufacturing companies aren’t going to have perfect books ready to go. They tend to use simple accounting practices, running their finances out of QuickBooks and homegrown operational processes.

While you don’t necessarily need a major overhaul of your financials and operations, there are simple things you can do to help create a smooth process for your potential buyers.

Here are the most helpful and relevant documents to gather and prepare:

• 3 years of P&L statements: It’s best practice to use accrual-based accounting, which shows a clearer picture of growth over time. However, cash basis accounting can also work.
• Audited financials: Make sure to use a trusted and reputable accounting firm.
• Current balance sheet: This gives buyers a snapshot of what you own versus what you owe.
• 12 months of bank statements: These statements show the actual cash flowing in and out of your business over a full year. It’s good for buyers to see consistent customer deposits and understand your production cycles and working capital patterns.
• Basic cash flow summary: You can supplement your bank statements with a simple cash flow summary, showing seasonal variations and working capital requirements.
• Last 2 tax returns: Tax returns provide an official, third-party verified record of your income and expenses, confirming your reported profits.
• Equipment list with ages/condition: This can be as simple as listing machinery age, production equipment conditions, and documenting any major repairs needed or recently completed maintenance schedules.
• Customer contract list: You likely already have this ready to go. You’ll want a list of long-term contracts, purchase orders, and customer concentration details.

You also want to gather all legal documents, from your business formation documents to labor documentation and manufacturing-specific licensing.

Prepare All Relevant Legal Documents

Your buyer’s legal team will be going through your legal documents. You likely already have a lot of these documents available, or can easily retrieve them if needed. Some documents may take some time, especially if you have several different departments and locations within your company.

Below is a high-level overview of the documents to prepare. You can delegate these tasks to your lawyer, CFO, or operations manager.

• Business formation documents: Articles of incorporation/organization, operating agreements, partnership agreements, and corporate bylaws that establish your business structure. (Usually straightforward to locate)
• Manufacturing-specific licensing: Current manufacturing licenses, quality certifications (ISO 9001, ISO 14001), industry-specific certifications (automotive IATF 16949, aerospace AS9100, medical device ISO 13485), and regulatory compliance documentation. (Can be time-consuming if certifications are scattered across different departments)
• Environmental compliance: EPA permits for air and water discharge, hazardous waste management documentation, environmental site assessments, and compliance with state and local environmental regulations. (Often the most complex and time-consuming section to compile)
• Employment documentation: Employee contracts, non-compete/non-solicitation agreements, skilled technician certifications, union contracts (if applicable), and documentation of required OSHA safety training. (Can take weeks if employee files aren’t centralized)
• Supply and customer contracts: Current supplier agreements, long-term customer contracts, purchase orders, and any exclusive distribution or licensing agreements that may transfer to the new owner.
• Equipment & facility documentation: Equipment ownership documentation, facility leases, machinery warranties, maintenance contracts, and any equipment financing agreements.
• Insurance & liability coverage: Current liability insurance policies, product liability coverage, workers’ compensation, environmental liability insurance, and key person life insurance policies.
• Tax & regulatory records: Business tax returns, sales tax permits, import/export documentation, customs compliance records, and any regulatory compliance certificates.

Having these documents organized ahead of time speeds up the due diligence process and shows buyers you run a well-documented operation. Plan to start this process 3–6 months before going to market, as environmental and employment documentation often take the longest to compile.

Another way you can expedite the due diligence process is by creating a virtual data room. A data room is a secure digital repository where you can organize all of your critical business information, like the documents outlined above. Buyers can then access this information easily.

Using a data room can lead to faster due diligence (as you’re not dealing with sending documents back and forth through email threads) and higher buyer confidence. It’s a more professional and technologically advanced way to share documents, signaling to the buyer that you have your ducks in a row.

As the owner, having a data room also makes it easier for you to update any documents.

Remove Operational Gaps and Key Person Dependencies

One of the most impactful things you can do as you prepare to sell is to make yourself redundant as the business owner.

For owners of manufacturing companies, this means finding an employee or putting together a team that can help make high-level, executive decisions and maintain the critical relationships (such as with suppliers) you’ve maintained.

Think about it from a buyer’s perspective: if you’re the only one with a relationship with your biggest customer or the sole person who understands your pricing strategy and market positioning, that creates significant risk.

One solution is to broaden these critical relationships and document your strategic thinking. This might mean introducing your operations manager to key customers, having your sales team take the lead on important supplier relationships, or creating clear documentation around your pricing methodology and competitive positioning.

You should also consider whether there’s specialized technical knowledge about your production processes, quality standards, or equipment that exists only in your head. Even if your SOPs cover day-to-day operations, buyers want to know that the deeper institutional knowledge won’t walk out the door with you.

Taking these steps not only reduces buyer concerns but also demonstrates that you’ve built a mature business that can thrive beyond your personal involvement.

Optimize Your Customer Contracts to Show Reliable, Recurring Revenue

It’s best to demonstrate a diverse portfolio of agreements, including long-term supply contracts, master service agreements with scheduled releases, multi-year production contracts, and varied contract expiration dates to minimize renewal risk.

But the takeaway here is to show reliable and recurring revenue in a way that makes the most sense for your business. Long-term manufacturing contracts are great as they provide predictable cash flow and enable efficient production planning. If your business relies heavily on one-off orders and spot market sales, a buyer may lower their valuation of your company, as there’s greater risk for them.

If you can’t reduce customer concentration or renew contracts before your exit, here’s how you can work to prevent a lower valuation:

• Proving contract history and stability by highlighting renewal rates and customer retention. A comprehensive account management process demonstrates that your business is committed to delivering high-quality products and services to your customers, even after your exit.
• Exploring potential opportunities by showing your capacity to serve existing customers with additional products or expanded production capacity.
• Using earnouts tied to future renewals to align incentives and demonstrate confidence in customer relationships.

How to Address Supply Chain Vulnerabilities and Show Operational Resilience

Manufacturing companies face unique challenges that can significantly impact valuation. Recent disruptions such as the Trump administration tariffs, geopolitical tensions, and supply chain vulnerabilities have forced manufacturers to reassess their supply chains and operational resilience.

Here are some things to consider doing:

• Diversify your supply chain: It’s nice to be able to show buyers that you’ve diversified your supplier relationships across different geographic regions and have backup suppliers for critical components. If you’ve taken steps to reduce reliance on any single supplier or region, that demonstrates forward-thinking management that buyers appreciate.
• Manage your inventory to optimize sales and free up cash flow: Buyers like to see you have a handle on inventory — not too much sitting around tying up cash, but enough safety stock to avoid production delays. If you can show consistent inventory turnover rates and minimal obsolete inventory, that’s a positive signal about your operational efficiency.
• Use technology and automation to improve your business: It’s helpful if you can demonstrate investments in modern equipment and systems that improve efficiency. Whether it’s newer CNC machines, inventory management software, or automated processes, buyers want to see that you’re keeping pace with industry standards rather than running on outdated technology.
• Develop your workforce: If you’ve invested in training programs or have strategies for retaining skilled workers, that’s valuable to highlight. Manufacturing faces real challenges with an aging workforce, so showing you’ve thought about succession planning and skills development demonstrates operational maturity.

Marketing Your Business and Increasing Buyer Coverage

So far, we’ve covered the importance of getting your ducks in a row before going to market to sell your business. By knowing your goals, preparing for due diligence, and optimizing your contracts and operations, you’re putting your best foot forward. You understand the value of your company, and you know what you want to achieve with your exit.

But you still need to target a healthy number of buyers. The more qualified buyers you target, the greater the chance you can find one who will help you achieve your ideal exit. Often, business owners underestimate how many buyers they’ll need to target before finding the right one.

For example, one deal closed within the Axial network received 290 signed NDAs from buyers. That means 290 initial buyers signed an NDA so they could learn more about the business being sold. From that 290, 60 buyers issued an Indicator of Interest (IOI), a good indicator that they’re serious about buying the business. From that 60, the owner and M&A advisor narrowed the list to 12 potential buyers. In the end, that owner got the exit they wanted, but it took 290 interested buyers to find the one who was the right fit.

Finding so many qualified buyers is a challenge for business owners. When you work with an M&A advisor that we introduced you to, you’re working with one who has a ready-to-go network of buyers — those who have bought businesses like yours in the past. This helps increase buyer coverage, but also makes sure you’re only focusing on buyers who are potentially a good fit.

How Your M&A Advisor Will Evaluate Buyers

As buyers express interest, your advisor will continually assess them against your criteria. This means figuring out if:

• The buyer has enough capital to close the deal: At the most basic level, understanding their capital sources helps determine whether your manufacturing company is the right fit in terms of size and whether they have the financial capacity to complete the deal, including any required working capital adjustments and post-closing capital expenditures.
• The buyer has manufacturing industry experience: Targeting buyers with relevant manufacturing experience offers several benefits. It ensures your business will be well-managed after your exit, simplifies demonstrating your company’s value, and enables a faster sale due to the buyer’s familiarity with production cycles, supply chain management, and regulatory compliance requirements.
• The buyer understands regulatory and compliance requirements: Manufacturing businesses face complex regulatory environments, including environmental compliance, safety standards, and industry-specific certifications. Buyers must demonstrate the capability to maintain these critical compliance programs.
• The buyer has technical and operational expertise: Manufacturing requires deeper operational knowledge than service businesses. Buyers should understand production processes, quality control systems, equipment maintenance, and supply chain management.
• The buyer has the internal resources to handle the acquisition: This is particularly important if you’re dealing with a smaller manufacturing firm that may not have the resources to process the acquisition and handle post-transaction integration, especially if they’ve recently acquired another business.

An advisor saves you a lot of time here.

First, they can more easily disqualify “tire kickers” who aren’t genuinely interested (or capable) of acquiring your manufacturing business.

Second, when a buyer is interested, they’ll handle the process of moving them further down the funnel. This includes:

• Having them sign an NDA helps protect your company’s privacy before you share more detailed information around operations and financials.
• Sharing a CIM (Confidential Information Memorandum) with them, which is a pitch book that explains in more detail the long-term value of your business.

Overall, what an M&A advisor does very well, and partially why working with one can increase your final sale price between 6% and 25%, is to craft a story around your business that demonstrates value to the buyer.

Negotiation, Structuring, and Closing the Deal

When you identify a purchaser who aligns well with your exit objectives, you’ll finalize a Letter of Intent (LOI). This represents your buyer’s commitment to purchase, and it means your company is effectively removed from the market for a specified period (typically 90 days). This allows the purchaser to conduct due diligence and present a formal offer, assuming everything meets their evaluation criteria.

As you navigate through negotiations, it’s crucial to recall the selling motivations you established in step one of your business exit planning. The ultimate transaction price isn’t merely a figure; it also represents what you hope to preserve and what’s required to support the upcoming phase of your personal journey — whether that’s a fresh investment opportunity, retirement planning, or funding your family’s educational needs.

Your M&A advisor will assist you through the final decision process and help you organize the transaction to achieve your post-sale objectives. This is especially important for manufacturing companies, where specific industry challenges often become negotiation points.

For instance, if you have high working capital requirements due to longer customer payment terms, a purchaser might structure the deal with a working capital adjustment mechanism and hold back 15-20% of the purchase price in escrow for 18 months to ensure cash flow stabilizes as projected. Or if you’re heavily dependent on a few key employees whose retention is uncertain, the buyer might propose an earnout tied to maintaining those key personnel for 12–24 months post-closing, since losing them could significantly impact operations.

Your advisor brings critical value here because they understand both your manufacturing operation and current market conditions. They can help you evaluate whether proposed deal structures are realistic given your operational constraints and industry standards. They’ll also negotiate terms that protect your interests — ensuring earnout periods aren’t too long, targets are achievable given normal business fluctuations, and you maintain enough operational control during any transition period.

A seasoned advisor can help you impartially assess these proposals and identify the optimal deal framework for your situation. They balance immediate cash needs with future upside potential while accounting for the unique risks manufacturing companies face in today’s market.

How to Find the Best M&A Advisor for Your Manufacturing Business

Throughout this post, we covered how you can value and sell your manufacturing business. A key part to navigating this process successfully is to partner with an M&A advisor.

M&A advisors can:

• Increase buyer coverage to improve your chances of getting the exit you want
• Increase your final sale price between 6% and 25%
• Save you 30+ hours a week, based on estimates from a survey we ran within our network

However, these benefits depend on working with the right M&A advisor. At Axial, we specialize in helping owners of advanced manufacturing businesses find the best M&A advisor. Our network of buyers is particularly active in acquiring companies with automation, robotics, IIoT technologies, and sophisticated manufacturing processes. We focus on connecting owners of technology-driven manufacturing companies with buyers who understand and value advanced manufacturing capabilities.

We start by pairing you with an Exit Consultant who gets to know your business and your exit goals.

Your Exit Consultant will leverage Axial’s network of 3,000+ M&A advisors to create a shortlist of candidates with:

• Recent, relevant deal experience in the manufacturing industry.
• Track record of advancing prospective buyers from initial interest to submitted bids.
• Strong down-funnel success, including the number of bids generated and successful sales completed within the Axial network.
• Positive feedback on professionalism, reputation, and responsiveness.

We’ll send you a curated list of 3–5 qualified advisors with experience in selling businesses like yours, complete with detailed insights to help you evaluate your options and resources to prepare for meetings with your candidates.

Schedule your free exit consultation today.

Additional Resources for Owners Looking to Sell Their Business

At Axial, we offer several resources for small business owners looking to sell their company, learn more about the M&A process, and better understand the value of their business.

Here are just some of the resources that can be helpful to you:

• Free Business Valuation Calculator: Use this calculator to get a rough estimate of your business’s value, based on an industry-specific DCF analysis trusted by M&A advisors.
• Checklist for Selling Your Business: We break down the selling process into an easy-to-follow checklist, including a business exit timeline to help you determine when to start the M&A process.
• Business Brokers vs. M&A Advisors: We clear up the confusion around the roles of business brokers and M&A advisors, explaining how each operates.

These are just a few of the resources we’ve created for business owners. You can find more here.

FAQs

How Do You Value a Manufacturing Business for Sale?

To value a manufacturing business for sale, you want to conduct multiple analyses, including:

• Discounted Cash Flow: This projects future cash flows based on production cycles and working capital needs.
• Comparable Companies Analysis: This benchmarks your company against similar businesses.
• Precedent Transactions Analysis: This uses recent sale prices of comparable companies.

These analyses will look at critical value drivers such as capacity utilization, customer concentration, supply chain stability, and working capital efficiency.

Then this number is expressed as a multiple of your EBITDA, such as 2x EBITDA, 3.5x EBITDA, etc.

If you’re looking for a high-level valuation of your manufacturing company, you can use Axial’s free business valuation calculator. It uses an industry-specified DCF methodology to help you arrive at a valuation range. While it won’t be as accurate and detailed as working with an M&A advisor, it can give you a good idea of your company’s value.

What Multiples Do Manufacturing Companies Sell for?

Your EBITDA multiple will depend on several factors unique to your business, including size, geography, customer concentration, supply chain diversification, and more.

There’s a lot of data out there on average EBITDA multiples, but they range drastically across different sources. One survey shows EBITDA multiples can range from 2.6x to 16x+. Another shows the average is between 5x and 8x. Your multiple depends on your specific business and what is driving your value.

To get your most accurate valuation range and EBITDA multiple, you want to work with an M&A advisor who has experience in selling companies like yours. They’ll know first-hand what buyers are willing to pay. They’ll use various valuation methods to conduct an accurate and comprehensive valuation of your company.

How Do I Sell My Manufacturing Business?

To sell your manufacturing business, you want to:

• Prepare your business for exit, which includes getting critical documents and removing key person dependencies
• Market your business to a good number of qualified buyers.
• Evaluate potential buyers
• Negotiate and structure the deal

Throughout this entire M&A process, it’s best to work with an M&A advisor. They can increase buyer coverage, making you more likely to maximize your exit outcomes. They can also increase the final sale price, with data showing that working with an M&A advisor can bring you a final sale price that is 6-25% higher than you would have received otherwise.