Metal Product Manufacturing Business Valuation Benchmarks

Business owners, prospective buyers, and industry investors rely on a diverse set of financial benchmarks to assess the value of a business. We have compiled data from current BizBuySell listings and sold businesses to provide insight into the business for sale market and important benchmarks for pricing and evaluating metal product manufacturing businesses relative to industry standards.

See also: Machine Shop & Tooling Business Valuation Multiples & Financial Benchmarks

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Highlights of Metal Product Manufacturers Sold on BizBuySell

Metal product manufacturing businesses listed and sold on BizBuySell engage in the fabrication and manufacturing of metal products for sale to end customers as well as for use in manufacturing downstream. Additionally, some smaller businesses in this category focus on specific aspect of metal production, like finishing or specialty milling. These businesses are locally owned and independently operated with very few franchise brands in the space.

Metal Product Manufacturing Business Transaction Trends

Median sale prices of metal product manufacturing businesses listed and sold on BizBuySell have increased substantially since the Covid-19 pandemic and subsequent supply-chain shortages, boosted by demand for domestic manufacturing capacity. Since 2020, median sale price has levelled off somewhat, growing 14% in the five-year period through 2024.

Metal Product Manufacturing Business Valuation Multiples

Valuation, or pricing, multiples are financial tools that allow for comparisons between businesses that have different levels of sales and income. They represent the sales price of a business relative to its financial performance, and given enough individual business sales data, they represent what the market is willing to pay for a business given its revenue and earnings.

Valuation Trends

Business values and associated multiples fluctuate over time, influenced by a variety of macroeconomic factors such as interest rates, inflation, consumer spending, and overall economic growth. Revenue and earnings (seller's discretionary earnings) multiples of metal manufacturers sold on BizBuySell have remained fairly consistent, moving primarily with larger market forces such as manufacturing demand and interest rates, though there was a substantial increase in 2024, with an average earnings multiple 11% above the five-year average.

Earnings Multiples

Earnings multiples represent the value of a business relative to its owner’s discretionary earnings or "cash flow". Arguably the most important valuation metric - as seller's discretionary earnings will often dictate how much a buyer is able to borrow to finance the business acquisition - business valuations tend to hinge on the earnings multiple.

Revenue Multiples

Revenue multiples represent the value of a business relative to its overall annual sales or revenue. In conjunction with an earnings analysis, revenue multiples are commonly used to value a business based on its top line sales.

How to Interpret These Multiples

Recent Listings vs. Sold Businesses

We calculate and provide valuation multiples from two sources: Current and recent listings of metal product manufacturing businesses for sale, and our database of "comparable" businesses sold on BizBuySell. Multiples based on listing data are usually higher due to owners setting asking prices above what their businesses might typically sell for. This occurs either intentionally as a negotiation strategy, or incidentally due to business owners’ common tendency to overvalue their own businesses. When current listing multiples are lower, that signifies decreasing values or previously inflated values of sold businesses.

Multiples based on comparable businesses - "comps" in business broker parlance - are much more useful as they represent the prices at which businesses ultimately get sold. Business brokers and valuation professionals will always turn to local comps when pricing businesses for sale or evaluating businesses for acquisition. We provide both sets of data at the national level to offer general context.

Quartiles, Median, and Average

No two businesses are identical, and as such, valuation multiples exist in a range. We have carved out four common values within this range: Lower quartile represents the value under which the lowest 25% of valuation multiples fell. Upper quartile represents the value above which the highest 25% of multiples fell. Median is the middle of the range, and average is the mean of the set. Mean is almost always higher than the median, driven by a minority of high volume, high value businesses sold at multiples above the upper quartile.

Businesses with consistent financial performance, above average revenue and earnings, demonstrable growth potential, low owner involvement, unique competitive advantages, and a seller willing to finance will command a multiple at or above the upper quartile. Smaller businesses with thin profit margins, full-time owner involvement, and many direct competitors will trade at or below the lower quartile. Most businesses will fall somewhere in the middle.

Based on this data, half of metal product manufacturers are valued and sold between 2.22 and 3.66 times their annual seller discretionary earnings, with 25% of well-run, larger businesses trading above this range, and 25% of smaller, less desirable businesses trading below.

Financial Benchmarks

To determine how a business compares in terms of revenue and earnings performance relative to industry peers, it’s necessary to have some insight into industry standards. "Benchmarking" describes the practice of comparing a business’s financial performance to typical industry standards to determine where a business falls relative to other businesses in the same industry. These benchmarks can help guide owners and investors towards appropriate valuation multiples from the range above.

To that end, we have aggregated metal product manufacturer financial ranges useful for comparing an individual business to its peers sold and for sale.

Metal Product Manufacturing Business Revenue and Earnings Trends

Median revenue and owner's discretionary earnings of metal product manufacturers sold on BizBuySell have both increased materially since getting an initial boost from pandemic-related supply chain issues. Demand for U.S. manufacturing capacity has helped to drive up median revenue of these businesses 20% since 2020 (nearly 60% greater than pre-pandemic levels), though inflation likely played a role in driving down profit margins.

Earnings Ranges

Discretionary earnings (used interchangeably with the terms "cash flow" and seller's discretionary earnings or SDE) is often the crux of business valuations, so it is important to benchmark it relative to similar businesses traded on the market. Below you will find reported owner's discretionary earnings ranges of metal product manufacturers sold over the past five years, as well as from recent metal product manufacturing business for sale listings.

Revenue Ranges

Sales volume plays a large role in business valuation, as it measures the size of the potential income opportunity for new ownership. It's not uncommon for buyers to select an earnings multiple range based on overall revenue. The table below includes revenue ranges of metal product manufacturers sold over the past five years and recent businesses listed for sale.

How Revenue and Earnings Level Affects Business Values

Clearly higher levels of earnings lead to higher valuations, even given the same multiple. However, valuation multiples also tend to rise with business sales volume. Metal product manufacturing businesses that generate higher sales (and maintain reasonable profit margins) tend to sell for earnings multiples on the higher end. So, a metal manufacturer generating revenues over $3MM annually may sell for an earnings multiple of 3.7 or higher, where a smaller metal manufacturer with sales below $900k may trade under 2.2 times earnings.

This tendency for higher sales volumes to fetch higher valuation multiples is largely driven by the economics of business acquisition financing. Higher volume businesses give buyers more cushion to cover debt service obligations and still have enough left over to pay the new owner a reasonable return on the purchase price.

Sector Comparisons

For a more complete understanding of the market and valuation standards, consider comparisons within the broader manufacturing sector. The chart and table below include key metrics from sales of manufacturing businesses on BizBuySell between 2020 and 2024. Note the tight correlation between median revenue and average earnings multiple.

Like most types of manufacturing businesses, metal product manufacturers are valued in-line with their revenue volume. Assuming all other aspect of the business are in good order, the key driver of higher or lower valuations will be sales/revenue volume, growth, and profitability.

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