Your complete guide to manufacturing business transactions. Valuations, EPA compliance, OSHA requirements, and expert resources.
Illinois is a major manufacturing hub with over 12,000 manufacturing companies employing hundreds of thousands of workers. From food processing to machinery, metal fabrication to plastics, Illinois manufacturers serve markets across the nation and around the world.
Manufacturing businesses include production facilities, assembly plants, fabrication shops, and specialized manufacturing operations. These businesses often have significant equipment, real estate, and workforce considerations that make transactions more complex than service businesses.
| Valuation Method | Multiple Range | Notes |
|---|---|---|
| SDE Multiple | 2.5x - 4.0x | Seller's Discretionary Earnings |
| EBITDA Multiple | 4.0x - 6.0x | For larger operations ($1M+ EBITDA) |
| Asset-Based | Varies | Equipment + inventory + real estate |
Selling a manufacturing business requires careful preparation and understanding of industry-specific factors. Here's what you need to know:
Acquiring a manufacturing business offers significant opportunities but requires thorough due diligence. Here's what buyers should know:
Largest manufacturing hub with diverse industries.
Aerospace and machine tool manufacturing.
Heavy equipment and agricultural machinery.
Agricultural equipment and metal fabrication.
Food processing and agricultural products.
Logistics and distribution manufacturing.
Manufacturing businesses are typically valued using SDE multiples (2.5-4.0x) for smaller operations or EBITDA multiples (4.0-6.0x) for larger companies. Asset-based valuations considering equipment, inventory, and real estate are also common. Key factors include equipment condition, customer concentration, proprietary processes, and workforce stability.
Environmental considerations include EPA compliance, hazardous waste handling, air quality permits, stormwater management, and potential soil/groundwater contamination. A Phase I Environmental Site Assessment is typically required, and Phase II testing may be needed if issues are identified. Environmental liabilities can significantly impact deal structure.
Manufacturing business sales typically take 9-18 months from listing to closing. The timeline depends on business size, complexity, environmental issues, and market conditions. Larger transactions with real estate and significant equipment may take longer due to financing and due diligence requirements.
SBA 7(a) loans are popular for manufacturing acquisitions up to $5 million. SBA 504 loans can finance real estate and equipment. Conventional bank financing, equipment financing, and seller financing are also common. Larger transactions may involve private equity or mezzanine financing.
Get expert guidance for your Illinois manufacturing business transaction.