The Situation

Our client owned a precision manufacturing company in Silicon Valley, known for delivering high-quality CNC machining, sheet metal fabrication, and custom assemblies. The business had a loyal customer base, strong profits well above industry norms, and a skilled team.

When a serious family health issue came up, the owner needed to step away—and quickly. That meant selling the business within a few months. The goal wasn’t just speed, but finding the right buyer who would understand the value and continue the legacy.

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Challenges We Faced

1. Tight Timeline

The owner needed to close the deal within six months. That meant working efficiently across all stages—from marketing to due diligence—without letting quality slip.

2. Customer Dependence

About half of the company’s revenue came from one long-standing customer. While this showed strength in relationships, it raised concerns for some buyers who prefer more customer diversity.

3. Unfinished Jobs and Advance Spending

At the time of sale, the company had already spent over $500K on materials and outsourced services for upcoming jobs. Because these parts weren’t yet delivered or invoiced, the buyer wasn’t sure how to value them or if they would generate future revenue.

4. Overloaded Accountant Slowing Down Diligence

The company’s long-time accountant was already behind on regular work—and couldn’t keep up with the intense due diligence process. Without additional support, this could have stalled the deal entirely.

What We Did

✅ Ran a Focused, Targeted Outreach

We didn’t just cast a wide net—we identified and engaged buyers with experience in acquiring manufacturing companies, especially those who understood and were comfortable with customer concentration risks.

✅ Built Trust Through Honest Conversations

We had transparent discussions with the buyer about both the strengths and challenges of the business. We shared historical data, customer track records, and future potential. This honesty helped build trust and keep momentum.

✅ Solved the Work-in-Progress Issue Creatively

Rather than argue over what counted as inventory, we helped structure a fair solution:

• A $400K holdback was agreed upon at closing.
• The money would be paid out in phases, once certain milestones were hit—like receiving customer orders or shipping parts.
• This was kept separate from any performance bonuses, making the arrangement clean and clear.

✅ Bridged a Critical Resource Gap

We quickly identified that the company’s accountant couldn’t keep up with due diligence. Going beyond the usual role of a broker, we tapped into our network of accountants, worked with the company’s CPA to vet options, and helped onboard the right support. This hands-on involvement kept the diligence process on track and ensured both parties had what they needed to move forward.

The Outcome

• The company was sold within six months, as planned.
• The buyer—a family office with a track record of buying and growing contract manufacturers—was a great strategic fit.
• Risks were addressed openly, and the buyer felt confident about the business’s future.
• Work-in-progress and resource challenges were resolved smoothly through creative structuring and hands-on support.
• The seller stayed on for a 12-month transition, ensuring continuity.

What You Can Learn From This

• Life happens—sometimes a personal crisis forces an urgent sale. With the right help, you can still exit on your terms.
• Openly addressing risks doesn’t scare off the right buyer—it builds credibility.
• Small bottlenecks, like understaffed accounting, can derail deals. A proactive advisor can make all the difference.
• Tailored solutions—not one-size-fits-all playbooks—help close deals in complex situations.