Precision machining for aerospace and defense primes. Two plants in Wisconsin, 210 employees, second-generation family ownership at the time of acquisition.
The company had been owned by the same family since 1974 and run since 1998 by the founder's son, who was sixty-three and had two children with no interest in machining. It was profitable, it had never missed a delivery to its largest customer in eleven years, and it had never had a budget.
An intermediary in Milwaukee brought it to us in March 2022. It had been shown to four buyers already, three of whom had made an offer conditional on the owner staying five years. He was not willing to stay five years, and nobody had asked him what he was willing to do instead.
Two things were visible from the financials. Margin varied by more than twenty points between customers and nobody in the company could say why, because job-level costing did not exist. And the second plant, acquired in 2011, was running at roughly sixty percent of capacity.
The third thing was not in the financials. There were at least six machining shops of similar size within two hours, most owned by men in their sixties, and the seller knew all of them by name.
An operating partner took the chief executive role at closing. The seller signed an eighteen-month consulting agreement covering customer relationships and rolled 22% of his proceeds into the new holding company.
Job-level costing was in place by day sixty. It showed that two long-standing customers were being served at a loss, both of which had been priced in 2014 and never revisited. Repricing one and declining to renew the other moved EBITDA by $1.1M in the first year, and neither customer was lost.
Two add-on acquisitions followed, in 2023 and 2025. Both were introduced by the seller. Both were absorbed into the underused second plant rather than their own facilities, which is the reason the economics worked.
The company is held today. EBITDA has roughly doubled since entry, the second plant runs near capacity, and the management team has two people in senior roles who were supervisors at the time of acquisition.
The seller remains a director and attends every board meeting, four years after he stopped running the company. His retained stake is currently worth several times what he rolled, and he tells the story to every owner we introduce him to.
We underestimated how long it would take to recruit a plant manager for the second facility, and ran nine months longer than planned with an interim. The 2023 add-on was integrated later than intended as a direct result.
Including the two that did not work. If you are an owner or an intermediary, call the sellers on any of them.
Back to portfolio