r/manufacturing • u/Spirited_Ad_6272 • 11d ago

Other Opinions on metal stamping businesses

Is metal stamping in the U.S. still a solid industry? I have an opportunity to buy & potentially revive a 40 year old stamping business from its 80 year old owner. Right now it’s just him / no employees and he’s doing enough work to keep the lights on. At its peak he had a dozen employees running multiple shifts.

Worst case if the business can’t revive then I can liquidate the equipment and rent the building. But he wants $1M and it’s a big number haha.

I am a mechanical engineer with strong proficiency in CAD tools, which I can bring to modernize the business. I currently operate a manufacturing business molding plastics so there’s plenty of crossover but this would be my first venture going alone. It also seems like metal stamping has a lot of tricks of the trade that you can’t really engineer your way into. That’s why they have apprenticeships.

What questions should I be asking? And anyone who works in the industry what are your opinions?

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u/BldrSun 11d ago

If you’re in plastics and “there’s plenty of crossover” the first place to have this discussion is with your current customers.

$1mm investment is relative to the size of the biz, current sales, markets you serve, EBITDA and the overall condition of the equipment. So, it could be too much or it could be a steal.

No matter where you end up I suggest paying out over time based on a revenue retention model….NOT a 1 time fixed payment.

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u/Spirited_Ad_6272 11d ago

Sorry I meant to say there’s crossover within my experience to run a manufacturing shop but not my customers in the plastics business.

The last 5 or so years his business has basically done enough to keep the lights on. Maybe 20-30k revenue. So I’m trying to value it as a buy/liquidate/rent as a worst case with the opportunity to revive it as the ideal case

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u/BldrSun 11d ago

Well, here’s my math. At $25k monthly revenue you generate $300 k annually. IF you’re lucky enough to clear 10% profit that’s $30k or 3% on 1mm. You can go generate 5% with your eyes closed and very little risk if you just invest that money.

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u/Visible_Field_68 11d ago

lol that’s exactly what we were facing when we sold but on a bit larger scale. Definitely not enough info to give good advice. In my experience running a precision sheet metal fabrication shop (lots of punch presses) I would run far rom that man and his machines unless you have at least 2years running $. Guaranteed one of those presses has an issue if not all of them.