Near Term Headwinds for Manufacturing Company

searcher profile

May 02, 2025

by a searcher in Toronto, ON, Canada

Hey All, I am pursuing a deal in clean tech manufacturing. The business is doing fairly ok atm and has an impressive set of tech Skills/R&D/Potential but I see near term macro headwinds, tariffs and competitive challenges, business concentration risks. All of which the seller (looking to retire) recognizes and agrees with me as well. Despite all the risks I am still interested in the business due to the technical skills, potential for product diversification and long term clean-tech growth opportunity. Considering the risks, I proposed an earn out structure and the Seller may consider. I also ran it by some industry experts and we concur the business has potential albeit with headwinds. I was wondering if anyone experienced has encountered a business with near-term Sales slowdown or cashflow risks over the next 2-3 years. How do we address such in a LOI / deal structure? Kindly DM me or some sample LOI or Earn-Out language at redacted
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commentor profile
Reply by a professional
from University of Pennsylvania in Tysons, VA, USA
Ideally you will price the deal on the lower expected revenue / CF and bridge the gap with an earnout.
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