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It's Only Common Sense: A Great Time to Sell Your Shop

Editor's Note: To listen to Dan's weekly column, as you've always done in the past, click here. For the written transcript, keep reading...There is a great deal of renewed interest in American board fabricators. Interestingly enough, those most interested are, as we say in Maine, “from away.” European companies are particularly interested in buying into the American market.

Many of these interested companies have been successful in Europe to the point where they have pretty much covered their market and now are looking to expand. Some have been quietly setting up sales teams here in North America, anticipating their next step will be to buy a shop here.

Some of the European companies I have been talking to lately say that it has become obvious that they are going to need an American company to sell their products here. There are several key reasons why investing in an American board shop is especially appealing to European multinationals:

• The technology is particularly suited to working with product development companies and there are more product development companies here than any other country in the world. Many are located in Silicon Valley, California, making that a particularly desirous location.
• The technology is especially suited for defense and aerospace work and that, of course, can only be supported by American-based companies.
• Our cultures are very similar, as in many cases are our languages.
• There is a growing trend toward a new Western market which is made up of both North American and European companies. This area of business if getting stronger with technology exchanges becoming more prevalent.
• America and Europe have a close relationship; they have been engaged in business for years and it is very easy for our European friends to come here to do business. In terms of equipment, we have been buying each others equipment and products for years.
• As far as the larger European based multinationals with PCB fabrication facilities globally, it makes great sense for them to have a factory in North American where many new products are developed. They can literally “own” part numbers from proof of design built in the U.S. to fully developed, mega-volumes built in their Asian factories.

For these reasons, European companies have started coming here to see what is available for them to buy. This should make American shop owners who have been trying to find buyers extremely optimistic to say the least. Except for the big guys--there's been very little merger and acquisition activity among American shops in the past few years (with a few exceptions of course) so this new activity will be breathing life into future M&A possibilities and opportunities.

For those of you interested in selling your board, shop the time is right. Here's a list of what you should focus on to make your company as appealing as possible for acquisition:

• Stress your location. Northern California, for example, is the most sought-after location in the country, if not the world, to locate a shop. The good news, or the bad news depending on your point of view, is that politics, both state and local, are making it virtually impossible for companies to green field new shops. This makes even the smallest and least attractive fabricator valuable if only for their licenses and permits.
• Stress your customer base. Buyers really want customers, especially blue-chip customers they have been trying to penetrate for years from afar. The more big-name customers you have, the more appealing you will be to European companies.
• Stress your registrations and qualifications. European buyers are looking for shops with military specs and other qualifications.
• Stress your management team. The better your management team the more appealing your shop will be to all buyers--not just the Europeans. The most difficult challenge when acquiring a board shop is management; if your shop is running well because of an experienced and professional team, it will be that much more attractive to all buyers.
• Stress that you are serious about selling. These buyers are serious; they are not tire kickers. They are looking to make a move in the immediate future. Make sure you are ready to deal when one of them comes knocking on your door.

Stay tuned: I think we are very close to American companies also buying shops in Europe because of the evolution into a new Western market happening today. It only makes sense that as the world gets smaller, the western world and North America become one. It’s only common sense.

If you are interested in my new guide that focuses on selling your shop to companies “from away,” e-mail danbbeaulieu@aol.com and I’ll send it to you free of charge.