Beyond financial performance, buyers and their advisory teams will dig deeply into the following areas when analyzing any tool & die M&A transaction. In the preparatory phase, Calder will work with you to document, highlight, and explain these areas of the business and get prepared for intense buyer scrutiny.

• Quality control and production processes: Tool & die businesses rely heavily on their quality control systems and production processes. It is essential to assess the target company's quality control measures, certifications, compliance with industry standards, and potential risks or issues that could impact product quality.
• Supply chain and sourcing: Understanding the target company's supply chain and sourcing arrangements is crucial. Buyers will want to evaluate relationships with suppliers, potential risks related to raw material availability, pricing agreements, and any long-term contracts that may impact the business.
• Regulatory compliance: Tool & die operations are subject to various regulations, such as environmental, health and safety, and labor laws. It is important to assess the target company's compliance with these regulations to identify any potential liabilities or risks associated with non-compliance.
• Equipment and technology: Tool & die often requires specialized equipment and technology. Buyers will evaluate the condition and maintenance of the target company's machinery, production capacity, technological capabilities, and potential needs for upgrades or replacements.
• Workforce considerations: Tool & die acquisitions involve the transfer of employees. It is essential to understand the target company's workforce, including employee contracts, labor union agreements, compensation and benefits structures, and any potential issues related to employee turnover or labor disputes.
• Financial and operational performance: Conduct a thorough financial analysis of the target company. Buyers will assess key financial metrics, such as revenue, profitability, cash flow, and inventory management. They will evaluate operational efficiency, capacity utilization, and the potential for cost synergies or operational improvements post-acquisition.
• Customer base and contracts: Buyers will want to understand the target company's customer base, key accounts, and contract relationships. Items like customer concentration, contract terms and duration, customer satisfaction levels, and any potential risks related to customer retention or loss will be scrutinized.
• Market and competitive landscape: Buyers will assess the target company's position within the market and understand the competitive landscape. They will evaluate market trends, competitive advantages, potential threats, and opportunities for growth or diversification.
• Intellectual property: Tool & die companies often possess valuable intellectual property (IP), such as patents, trademarks, copyrights, and trade secrets. Buyers will want to ensure that the target company's IP is properly protected and that the necessary licenses and agreements are in place.
• Integration challenges: Merging or acquiring a tool & die business often involves integration challenges, such as combining different processes, systems, and cultures. The ultimate buyer will develop a comprehensive integration plan to ensure a smooth transition and maximize the value of the acquisition.

There are a few reasons why tool & die businesses do not sell, and Calder has worked diligently to eliminate these primary obstacles to selling.

The number one reason that businesses do not sell is because there is a significant gap between what the seller wants and what the market provides in terms of valuation. Calder eliminates this by conducting a thorough “market-informed” business valuation before we ever ask for a client engagement. Because we often sell more than a dozen industrial businesses per year, we have an accurate pulse on valuation multiples, deal structure, and the state of the buyer pool. We combine our proprietary on-market data and insights with thorough research utilizing trusted valuation resources for businesses that match your specific industrial niche and financial performance. The result is a precision valuation analysis that reflects the market feedback you will receive from buyers if you decide to proceed with a sale process.

At this point, it is 100% up to you whether to move forward with a sale process. If the valuation is not where you need or want it to be, Calder can point you to resources that can help you to improve your valuation or we can all simply wait. Sometimes, tool & die business owners decide to wait 1-2 years before selling once they understand what drives valuation. At no point during our initial valuation process will you feel compelled to make a decision that is not in your best interest. Calder Capital is in it for the long game, and this means standing shoulder-to-shoulder with our prospects and clients and helping them to make the best decision for their businesses and lives.

The second reason that tool & die businesses do not sell is the quality of their financial records. When buyers and lenders are making critical decisions to pay and loan, respectively, millions of dollars, it is critically important to them that they can trust the information that they are receiving from the seller. Periodically, we receive information from tool & die business owners that contains errors or is not prepared to the accounting standards that buyers expect. During our business valuation exercise, if we identify areas where buyers are likely to be confused or have questions, or we encounter impasses with respect to obtaining the types of financial records that buyers and lenders will expect during the analysis and due diligence phase, we will discuss these with you and help you work with your CPA or other accounting advisors to prepare the business appropriately for the type of scrutiny that a sophisticated buyer will bring.