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March 15, 2020

by a searcher from New York University in Los Angeles, CA, USA

Does anyone have = experience in looking for deals in the equipment manufacturing space? I love the idea of making equipment but not sure on specifically to focus on. Looking at either a roll-up strategy or platform acquisition. My background is in engineering and business (focus on automotive) with experience working for various equipment manufacturers.

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Reply by a searcher
from Dartmouth College in Boston, MA, USA
Similar background here and considering doing something similar. I think one of the important things you need to look at with a company is what end markets is this exposed to? Are you making equipment for aerospace or auto? These are inherently cyclical and may be less desirable or more risky if you pile on a substantial amount of debt for acquisitions. Are you looking at a producer of medical equipment? That seems to be a bit more stable, but those companies may trade at higher multiples (at least in my anecdotal experience). If you're looking to do a roll up you'll need to be able to support the added leverage from acquisitions and the predictability/stability of your cash flows will be super important and the factors that determine this will likely be important as you go through diligence.
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Reply by a searcher
from University of Houston in Helotes, TX, USA
Closed a defense manufacturing company 12 days ago.

There are an extraordinary number of upper SME/low LMM types manufacturing things. Lots of room to run and play in.
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