A middle-market metal fabrication business secures a premium sale price with MGO’s strategic financial optimization and transaction support.
Background
A San Diego-based precision manufacturing company specializing in complex components for industries such as aerospace, defense, and medical equipment had been family-run for decades. The founders, proud of the strong reputation for quality and reliability they’d built, decided they were ready to sell the business and secure their legacy.
Challenge
The company initially entered escrow for a $30 million sale in the early 2000s, but the deal collapsed amid a major dip in the global stock market (which eliminated the acquiring company’s ability to finance the acquisition). After going through the entire sale process, the seller was exhausted when the deal collapsed due to external forces and hit pause on any further sales.
Almost 20 years later, the company had substantially more business — scaling production, expanding customer contracts, broadening its product line, and achieving stronger profitability. With the owner ready to revisit a sale, MGO was once again engaged to help position the company for maximum valuation, minimize overall federal and state income taxation, manage the entire financial presentation to any prospective buyers, and, ultimately, coordinate the sale transaction with the help of any external advisors (attorneys).
Approach
MGO worked closely with the company’s leadership to make sure the financials reflected the business’s maximum value to a potential buyer.
The MGO team:
- Reviews and optimizes financial statements on a monthly basis to confirm all results accurately reflected operational performance and profitability.
- Analyzes and reclassifies disbursements to identify items that are incorrectly expensed but should have been capitalized — improving the company’s EBITDA and overall financial presentation.
- Coordinates with investment bankers and attorneys to structure a seamless sale process and align strategies with the client’s long-term financial goals.
Throughout the process, MGO enables the business owners to remain confident in every financial detail being presented to potential buyers.
Value to Client
In this particular transaction, MGO’s proactive financial review and optimization efforts helped demonstrate the company’s true earning power, increasing buyer confidence and supporting a substantially higher sale price. Ultimately, the company successfully sold to an international buyer for $88 million — nearly triple its original valuation from the first sale attempt 20 years earlier.
This transaction provided the founders with the financial freedom to retire comfortably, and, more importantly, secure their family’s future with the legacy they built. Meanwhile, MGO continues to support the new international ownership group with ongoing tax, financial, and consulting services, helping to position the company for further long-term success.
Position Your Business for a Successful Transition
Whether you’re preparing for an eventual sale, merger, or succession plan, MGO can help you strengthen your financial position, restructure as needed to minimize taxation, and enhance overall value when it matters most. Reach out to our team today.