Valuation Feedback on Compliance-Driven Manufacturing Acquisition

October 02, 2025

by a searcher from North Carolina State University in San Diego, CA, USA

I am evaluating an opportunity to acquire a niche manufacturing business, and I'd appreciate your feedback on the business valuation estimates and deal structure. * Specialized B2B Manufacturing in the packaging/labeling market. * ISO-certified company with a long legacy, high client retention (100% of top 10 customers retained over the last 3 years), and focus on regulated end-markets (Medical diagnostics, Health & Beauty, Industrial & Chemical, Food & Beverage). * The top customer accounts for 32% of revenue average for past 3 years. * Revenue: Average Revenue of $4.2 to 5M for past 3 years * Profitability: 2024 Adjusted EBITDA of $1.13M, with a consistent Adjusted EBITDA Margin in the 20-27% range (2024: 23.6%). * SDE: Average for past 3 years: $1.3M Looking for feedback on: 1. Valuation Multiples: Given the $1.13M 2024 Adjusted EBITDA and focus on compliance-driven products for regulated markets, what EBITDA multiples are you seeing for niche, profitable, and well-established manufacturing/labeling businesses? 2. SBA Financing & Risk: I plan to use an SBA loan for financing. Lenders often flag high customer concentration as a risk. The top customer accounts for 32% of revenue average for past 3 years. Any specific due diligence steps or deal structuring components (e.g. forgivable seller note structure, etc.) have you successfully used to mitigate customer concentration risk for an SBA acquisition? Any high-level feedback or experience with compliance-driven B2B manufacturing would be greatly appreciated.

Reply by a searcher
in San Diego, CA, USA

If I were you, I’d pencil this at 4.75–5.25x EBITDA ($5.4M–$5.9M EV) assuming there is a professional management team in place. I’d pay a bit more if the seller can prove that top customer is locked in long-term close to the previous few years rebate. Proposed Deal Structure (assuming ~$5.7M purchase price midpoint): • Equity Injection: ~10% ($570K, can be partially seller carry to satisfy SBA). • SBA Loan: ~70% ($4.0M). • Seller Note: ~20% ($1.1M), with: • 50% standard repayment over 5–7 years. • 50% forgivable/contingent if top customer exits or significantly contracts within###-###-#### months. This way the bank feels protected, you reduce downside risk, and the seller still has skin in the game.

Reply by a searcher
from Duke University in Fort Mill, SC, USA

try using this https://chatgpt.com/g/g-67c6282b6d9c81918fdb4e9e278b6ca6-business-for-sale-analyst-by-ebit?model=gpt-4o can help get some insights on risks and financials

+9 more replies.

Join the discussion