What a buyer studies in an integration firm
| Engineering team | Controls, mechanical and robot programmers, how long each has been with you, and who leads jobs without the owner. |
|---|---|
| Backlog | Signed purchase orders, stage payments still due and the expected margin on each open project. |
| Job margins | Quoted versus actual margin on finished projects, so a buyer can see how well you estimate. |
| Repeat customers | How much work comes from plants that have hired you before, and through which purchasing paths. |
| Warranty and service | Open warranty work and service contracts that keep paying between big projects. |
Projects Make Earnings Lumpy
An integrator might book a huge line one year and smaller cells the next. Buyers know this and look at three to five years together. They also look at how revenue is recognized on long jobs.
A clear schedule of open projects, what has been billed, and what is still owed helps the buyer and your broker agree on a fair number.
Engineers Are the Asset
The tools in your shop are worth far less than the people who use them. A buyer will want to meet your lead engineers before closing, and may ask that key people sign on to stay.
If customers call the owner for every problem, the buyer sees risk. If project managers already own those relationships, the company is worth more.
Estimating Discipline
Buyers compare what you quoted to what each job really cost. A firm that hits its margins most of the time is a safer buy than one with a few big wins and a few painful losses.
- Change order history and how you bill extra work
- Penalties or holdbacks on late projects
- Any jobs that went badly and why
Customers and Their Rules
Many integrators around Detroit work for automakers, tier suppliers and food or packaging plants. Big customers often have approved vendor lists. A change in ownership can trigger paperwork to stay on them.
Your broker and attorney will check which customer terms need consent or notice before closing.
What Drives the Price
Buyers pay more for backlog that is signed, margins that are steady, and a team that stays. Most integrators of this size sell as asset sales; some larger firms sell stock. Read what buyers check in due diligence before you list.
If your firm is an S corporation or partnership, the year of the sale can affect your Michigan tax. Our guide to the flow through entity tax in the year you sell explains what to ask your CPA.
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