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Seller · Hughes Tank Company
The Right Deal
The owner of Hughes Tank Company on selling a Texas manufacturer, and what the process was actually like.
Closed transaction · March 2023
Hughes Tank Company
MDR & Associates took Hughes Tank Company, a tank manufacturer, through to closing in March 2023.
The transaction
- ClosedMarch 2023
- SectorManufacturing & industrial
- Founded1989
- BuyerPrivate equity group
- Engagement to closing180 days
- Represented byMDR & Associates
- Todayhughestank.com
The company today, in its own words. Designs and builds steel storage tanks and accessories for fuel, oil, water and more (UL 142, Flameshield, Permatank, UL 2085, ACT-100-U) in Venus, Texas, since 1989.
The sale
How it ran
The owner engaged us in the first quarter of 2022, and a buyer was found by May. After months of due diligence, we canceled that letter of intent in August.
We re-verified the earnings and went back to market in September. One month later there were six offers on the table. The owner chose The MAG Group of Dallas, and the business and its real estate closed on the same day, March 31, 2023.
The existing management stayed in place, and the company the owner had built over four decades carried on under it.
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What decided the price
What buyers look at in a manufacturing company
Adjusted EBITDA, not revenue
Earnings are recast to remove owner compensation above market, personal expenses and one-off items. Every add-back needs a paper trail, or a buyer strikes it out.
Equipment condition and age
A buyer prices the capital expenditure they will face in the first three years. Deferred maintenance comes straight off the offer.
Real estate, in or out
Owning the building can raise the total consideration, and it can also complicate the deal. It is usually cleaner to sell the operating company and lease the property back.
The full list, and who the buyers are: Selling a manufacturing company in Texas.
Your company
Talk to the firm that sold Hughes Tank Company
Four fields and a reply the same business day. Nothing you send is shared with anyone, and nothing reaches your employees, customers or competitors. If you would rather talk, call (855) 637-2776.
- A value range and what is driving it
- An honest answer about whether now is the time to sell
- No fee unless and until your company sells