Introduction
Manufacturing acquisitions can be lucrative but involve risks like customer concentration and equipment financing. Yaw Capital arranged financing for an engineer acquiring a $3.6M precision manufacturer.
The Challenge
- Revenue heavily tied to two customers.
- Expensive equipment needing updated valuations.
- Buyer had corporate but no ownership experience.
Our Solution
Yaw Capital secured a senior lender experienced in industrial financing:
- $3.6M package with favorable terms.
- Risk-mitigating covenants tied to customer contracts.
- Flexibility for future capex upgrades.
The Outcome
The deal closed in 82 days. Customer contracts were renewed post-closing, and the buyer grew revenue by 22% in year one.
Key Takeaways
- Customer concentration can be mitigated with covenants.
- Equipment-heavy deals require specialized lenders.
- Transition plans matter as much as financing.
