The Sale of a Steel Products Manufacturing Company (April–September 2025)
Introduction
In April 2025, the owners of a mid-sized steel products manufacturing company initiated a formal sale process after more than five decades of operating in a competitive and cyclical industry with plants in two states servicing customers in all 50 states. The company, which specialized in shelving and other products for government, industrial, and commercial warehousing and retail customers, had built a strong reputation for product quality and engineering expertise. With a nationwide customer base including some of the largest publicly traded companies in the country, the owners believed the timing was right to exit and capitalize on favorable interest from both strategic and commercial buyers.
The formal sale process began in April 2025 and led to the successful sale of the business in September 2025. The business ultimately sold for a valuation of 5× EBITDA. Eagle BTA acted for the sellers.
Company Background
The company, founded in the early 1970s, produced custom and standardized steel products for regional and national customers. Its product line included structural components, specialty steel assemblies for industrial equipment, and precision-fabricated items for infrastructure projects. With approximately 120 employees and a well-equipped 85,000-square-foot manufacturing facility, the company generated steady annual revenues and maintained EBITDA margins in the upper teens.
Key strengths included:
Long-term customer contracts with predictable recurring orders
Strong engineering and design capabilities
An efficient production line with modern CNC and robotic welding equipment
A management team with extensive industry experience
A culture focused on safety, quality, and continuous improvement
The owners, nearing retirement age, sought to sell the business to ensure continuity for employees and unlock the value they had built. They engaged an investment banking firm specializing in industrial and manufacturing transactions to guide them through the process.
Phase 1: Preparation
While the sale process formally began in April 2025, the preparation phase focusing on organizing financial records, documenting operational processes, and developing a compelling narrative for prospective buyers commenced 6 months prior.
Financial Review
Eagle BTA as the advisors prepared a normalized historical EBITDA analysis that accounted for:
Non-recurring expenses (e.g., one-time repair costs)
Owner compensation adjustments
Lease standardization for equipment and real estate
Working capital normalization
This analysis provided a clear and defendable EBITDA figure that would support the target valuation of 5×.
Consideration of the two primary business sale models (an asset sale also known as an Asset Purchase Agreement (APA) or a Stock Sale) and which may be most suitable to the circumstances is appropriate at this time.
This is also the stage at which the company chooses the team of advisors internal and external who will manage the transaction. Ensuring all those chosen are fully on board with the process is essential. In choosing the internal advisors one must keep in mind that senior management may be effectively negotiating themselves out of a job as a successful sale will likely bring in a new management team from the purchaser.
Phase 2: Buyer Outreach and Indications of Interest (April 2025)
In April the company received an expression of interest from a strategic acquirer. After considered discussion, the seller agreed to enter exclusive negotiations with this potential purchaser. A Non-Disclosure Agreement (NDA) was signed and certain confidential information was provided to the purchaser. This information exchange is critical to for the seller. Sufficient information needs to be provided to allow the purchaser to properly assess the target company but not so much as to damage the seller if the potential sale does not proceed. An NDA is an enforceable document but breach of its terms is very difficult to prove. The invited buyer also scheduled management meetings and site visits.
Phase 3: Letter of Intent and Beginning of Due Diligence (June 2025)
In mid-June, after much negotiation the potential buyer (a large metal products company seeking to expand its fabrication capabilities and geographic reach) provided a Letter of Intent (LOI). .
The signed LOI granted the buyer exclusivity and initiated an anticipated two-month due diligence period, running from mid-June to mid-August.
Phase 4: Due Diligence (June–August 2025)
The due diligence phase required substantial coordination between management, advisors, accountants, and lawyers. Given the company’s manufacturing complexity, diligence was wide-ranging and detailed.
Financial Due Diligence
The buyer conducted a Quality of Earnings (QoE) review, validating revenue streams, cost structures, working capital requirements, and normalized EBITDA. Their findings aligned closely with the seller’s original analysis, strengthening credibility and supporting the agreed-upon valuation.
Operational and Technical Due Diligence
Engineers and operations specialists spent several days onsite evaluating:
Machine utilization and capacity
Preventive maintenance programs
Supply chain stability
OSHA and environmental compliance
Production workflow and efficiencies
No significant operational red flags were discovered, though the buyer identified opportunities for capital improvements after acquisition.
Legal and Compliance Review
The legal diligence team examined:
Customer and supplier contracts
Intellectual property documentation
Employment agreements
Environmental impact records
Real estate titles and zoning compliance
Minor contract amendments were requested, but no major legal barriers emerged.
Cultural and Management Assessment
Because the buyer intended to retain the existing workforce, cultural compatibility was critical. Meetings with supervisors and key managers revealed strong workplace stability, low turnover, and a well-structured leadership team capable of operating independently.
By mid-August, the buyer confirmed they were prepared to proceed toward closing.
Phase 5: Final Negotiation and Closing (August–September 2025)
After diligence concluded, the parties moved into final purchase agreement negotiations. Several deal points required refinement, including working capital targets, indemnification caps, and escrow amounts. However, no material valuation adjustments were required, a testament to the thorough preparation and consistent performance of the company.
Key Deal Terms
Purchase Price: 5× normalized EBITDA
Structure: A combination of cash and Note at closing
Escrow: Standard percentage of purchase price held for indemnification
Working Capital: Peg established based on prior year with validation and adjustment one month post closing
Real Estate: Manufacturing facility included via a long-term lease arrangement with the existing landlord
All parties completed their legal drafts and finalizations by mid-August. The transaction closed successfully in early September 2025.
Post-Transaction Transition
The buyer retained all employees. The acquired company continued operating under its existing brand name for continuity with customers.
Conclusion
The sale of the steel products manufacturing company illustrates how strategic preparation, realistic valuation expectations, disciplined execution, and honest firm negotiations by the seller’s team can lead to a smooth and successful transaction. Beginning in April and concluding in September 2025, the six-month process demonstrated the importance of:
Early and thorough preparation
Accurate financial normalization
Strong advisor support
Clear communication during due diligence
Choosing the right buyer, not merely the highest bidder
Achieving a 5× EBITDA sale price reflected both the company’s long-term stability and the seller’s future growth potential. Ultimately, the transaction met and exceeded the owners’ financial objectives, ensured a satisfactory exit for them, continuity for employees, and positioned the business for its next chapter under new ownership.