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Precision Machine Shop and Fabricator

A Tier 1 panel supplier to a global rail OEM with a zero PPM defect record, 100% on-time delivery, and contracts running five to seven years.

Business Highlights

  • Tier 1 supplier status that took roughly five years to earn and is difficult to replicate
  • Zero PPM defect rate and a 100% on-time delivery record
  • Seven cross-trained employees covering CNC machining, laser cutting, welding, powder coating and QC in-house
  • ISO 9001 certified, with a CAGE code and ITAR approval in place
  • Contracts run five to seven years, with the primary customer indicating substantial demand runway

Considerations / Questions to Ask

  • Revenue is concentrated in one rail OEM. That single relationship is both the asset and the risk, and it needs to be understood in full.
  • Is Tier 1 approval attached to the business or to the current owner, and does it survive a change of control?
  • 57% EBITDA margins are extraordinary for a machine shop. Confirm what sits in that number.
  • Seven cross-trained people carry the entire operation. Who is critical, and what keeps them?
  • ITAR approval carries ownership and compliance conditions. Confirm the buyer can hold it.

Opportunities

  • A qualified Tier 1 position in rail takes years to earn, and that clock is already run
  • The customer has signalled demand well beyond current volume for suppliers who can qualify
  • ISO 9001, CAGE and ITAR together open defence work the shop is not currently pursuing
  • The same certifications and equipment serve adjacent OEMs without new capital