"Job shop" fabricators are difficult businesses to grow. Multiples are low-to-moderate values due to: i.) risk of one-time revenues and ii.) often negligible collateral values for aged machine tools. Your diligence focus should include a thorough analysis of the bidding function (# of bids / talent involved / success ratio / focus, if any, of the type of jobs bid / etc.). Compiling a strategy of what to do (automation needed, etc.) is the easy part. The hurdle is the target's ability (or lack thereof) to generate the cash necessary to fund the strategy. Your competition to acquire this business is most likely limited (required skill set of a potential buyer, etc.); use it to your advantage in deal structure and valuation.

If you're referring to metal fabrication companies, I've done quite a bit of research into that industry for some clients. We can zoom if you want more. Don't let anybody focus you too much on multiples, unless they can thoroughly help you understand what affects those.