M&A Advisory for Manufacturing Companies
S&P Global has ranked Sica | Fletcher #1 in its industry for sell-side M&A services for manufacturing companies since 2014. Our M&A services include:
- Working closely with owners to ensure a smooth deal process
- Maintaining relationships with a wide network of strategic acquirers and PE firms to identify the best buyer for the business
- Employing our extensive industry knowledge to secure the highest possible payout
The role of an M&A advisor is often overlooked by manufacturing company owners who believe a sale can be handled personally or with the help of an individual consultant. The reality is that M&A advisory firms allow companies to achieve higher multiples and more favorable deal structures. Industry research has shown that the difference in outcome can be substantial:
Average EBITDA multiple achieved through self-representation
Average EBITDA multiple achieved through an M&A advisory firm
Manufacturing Valuation Multiples
Below are graphs showing EBITDA and revenue multiples paid for private manufacturing companies in 2023. The values indicate 1st (low) and 3rd (high) quartile multiples for each industry.
The lower multiples displayed on this range tend to come from companies that were either self-represented, experienced high employee turnover in the 2 years prior to the sale, or had an unbalanced customer concentration, relying too heavily on 1 or 2 customers.
EBITDA Multiples for Private Manufacturing Companies, 2023
Revenue Multiples for Private Manufacturing Companies, 2023
M&A Advisory for Manufacturing Companies in 2023
Following a downturn in M&A activity in H2 2022, manufacturing M&A has been on a positive trajectory moving into H2 2023, with an 8% total increase in private manufacturing M&A activity and total deal value nearly doubling from $10B to $26B over a 6-month period. These gains are significant, given the longer downturn in production during the pandemic, when industry output as a whole fell ~43%. However, the sector has been rebounding, not just in terms of deal activity and value, but in terms of valuations, with multiples climbing back toward their 2019 highs.
Today’s market is rife with opportunity for manufacturing companies who can tell their story in the correct way. Our firm has long-standing relationships with a variety of buyers who seek out manufacturers – both strategics and private equity – and understands how to craft a pitch that will secure the best possible outcome for owners.