Currently in pre-LOI discussions with a 20-year-old technology intensive capital equipment manufacturer here in the southeast. The capital equipment space can be very cyclical in its nature and the previous 2 years of pandemic did not help (although they successfully navigated 2 sizeable PPP loans to forgiveness).

While I realized the traditional search looks for stable profitability as a key deal component, is there anyone in the community that has experience/familiarity in the acquisition of B2B industrial turnarounds (i.e. starting with break-even EBIDA)?? Owners are open to staying on for up to a year, and of course, are open to a seller financing component of the structure. Gross Margins for their products are in the 50~60% range when the market returns.

Appreciate thoughts from anyone with experience in this area.