Swarfcast Ep. 42 – John Habe IV on Valuing a Machining Business

By Lloyd and Noah Graff

Today’s podcast is part 2 of an interview we did with John Habe IV, President of Metal Seal Precision, a machining company based in Mentor, Ohio.

Listen to the podcast on the player below.

Over the last several years John has grown Metal Seal Precision both organically and through major acquisitions. According to John, growing through acquisitions can be financially rewarding but does not come easily. John discussed the difficulty in buying companies, which often have emotionally attached owners. He also talked about how he calculates the buy price of a company. He looks at cashflow, often called EBITDA in the acquisitions business, as well as criteria such as product sector, customer diversity, and management style of the current ownership.

Question: Is this a good time to go into the machining business? If so, what sector?

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3 thoughts on “Swarfcast Ep. 42 – John Habe IV on Valuing a Machining Business

  1. AvatarKeith Garrison

    Thanks Gents,
    I found that talk helpful. y wife and I have been running GBF Enterprises for 42 years. I love what I am doing but recently have been looking for a good exit strategy. We think our best value is to sell to a strategic buyer. Your talk let us look at some different points of view. I do not usually have time to listen to a podcast but am on vacation and cqan listen before anyone gets up.
    Best regards,
    Keith

     
  2. AvatarTom Hogge

    Would be risky to answer your question.
    I have been at this for over thirty years now . There is a strong market for machined parts .
    And The Trump administration has made it the best I have seen it in the thirty plus.
    I have seen many parts come back that went to China , India , and Mexico.
    And with the Tariffs Threat I get Customer inquires that I haven’t seen in years .
    But to start out , or over again ???? don’t think so.
    Customers , Big ones for sure want records. Financials, Quality , audits, tons of documentation that go back years. That start ups simply will not have .
    Acquisitions of existing with a trained workforce. now that is a different deal .

     

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