reply
by a professional
2w ago
from Binghamton University, State University of New York
in New York City, NY, USA
Hey @redacted, we do buy side QoE on a number of manufacturing deals and have worked across most of the categories like machinery and equipment OEMs, job shops and precision machining, contract manufacturers, metal fabrication, and industrial components and assemblies, so we know this space well and are familiar with the nuances (revenue recognition timing, whether that is shipment, customer acceptance, or recognized over time, and whether the current policy actually matches the contract terms; customer deposits and progress billings treated as revenue vs. deferred revenue; inventory costing and standards, aging and turnover, and the adequacy of obsolescence and slow-moving reserves against historical write-off experience; labor and overhead absorption rates and any over or under absorption sitting in work-in-process and finished goods; warranty and rework accruals versus actual historical claim cost; monthly revenue and gross margin by top customer and product line, with customer and end-market concentration; recurring aftermarket parts and service revenue vs. one-time machine sales; AR collectibility, retainage and reserve adequacy; working capital seasonality and the net working capital peg build; and owner and key-operator compensation normalization and replacement cost as the seller steps out, along with related party transactions and every add-back tied back to source documents) that need to be analyzed deeper to truly understand how the business is actually performing.
And the reason we know where those issues hide is because we are in these deals constantly. Just to mention that we completed a QoE on a $1.3M asset deal on the West Coast that just wrapped and are currently working on another $13M sheet metal fabrication acquisition in NY, so we work on manufacturing deals all year long, at both ends of the size range you're likely to see in your search.
So if you want to connect and talk through what we've seen in manufacturing deals and what's worth digging into on yours before you finalize the QoE and beyond, feel free to message me here or you can book a call on my calendar at redacted