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Engineering/contract manufacturing

Growth opportunity

$967,890 - Auckland



This is an opportunity for someone with a basic understanding of engineering/production processes to take over and grow a highly successful business. This engineering/contract manufacturing business has been family owned for nearly 50 years. It consistently produces an impressive profit to a single working owner.

The business could easily be grown from its current levels by a purchaser with good sales and marketing skills. The present owner does very little in the way of marketing relying instead on Yellow Pages advertising and the existing name and reputation. All required plant is in place and there is a skilled team of experienced, long serving production staff.

Over $1.2 million has been invested in plant and other fixed assets. The premises are also extensive, and well located for the Auckland motorway network.

A major part of the business is performing high volume contract manufacturing production work for corporate clients. Gross profit margin averages around 45% (after wages and materials costs).

The client base is diverse. In 2018/2019 the largest single client made up 8% of turnover.

Business Strengths

  • In business nearly 50 years
  • High gross profit margins - average 45% across the last four financial years
  • Broad range of production capabilities
  • Owner does not have to be 'on the tools', and the production staff report to the manager rather than the owner
  • Trained, experienced and loyal workforce - average length of service 12 years
  • Extensive plant - c$1.2 million of fixed assets at cost
  • Large, well located site
  • Broad spread of corporate clients - not reliant on any one client
  • No bad debts over the last four financial years
  • Scope for further growth through marketing
  • Monday to Friday operation
  • Flexible lease options (the owner is also the landlord)
  • Extended handover available by negotiation if required

This business is likely to suit someone with a basic understanding of engineering and manufacturing processes, and good sales and marketing skills.

Net Surplus $351,960 year ended 31 March 2019 EBPITD

EBPITD - Earnings before Proprietor, Interest, Tax and Depreciation

Contact: Jonathan Barrett
Office: Auckland

Confidentiality Agreement for Business Reference 200619, Broker Name Jonathan Barrett

Between Tabak Business Sales and the Interested Party.  The Interested Party must be an individual's name, NOT a company name.

In consideration of Tabak Business Sales (being any or all of Tabak Ltd (Licensed under REA 2008) and/or Tabak Business Sales Limited (Licensed under REA 2008) and their respective business brokers) entering into discussions relating to the possible acquisition of the assets or shares of any business(es) presented to me by Tabak Business Sales and specifically the business referenced above, I/We hereby agree and undertake as follows:

  1. To treat as totally confidential the identity of the business(es) disclosed to me and any details as to its operation or financial accounts;
  2. I acknowledge that the financial records, customer and supplier details and other information relating to the business to be disclosed to me shall at all times remain the sole and exclusive property of the Vendor and that such information is of competitive value and of a confidential nature and that loss or damage would be sustained by the Vendor if such information should be used or divulged by me for any purpose other than the evaluation of the purchase of the business or should it become into the possession of an unauthorised third party;
  3. Not to disclose the identity or any details of the operation or financial accounts to any third party (except my accountant or legal advisor who shall agree to respect this requirement for confidentiality) unless expressly authorised in writing by the Vendor or by Tabak Business Sales;
  4. Not to make an approach to the Vendor of any business disclosed to me by Tabak Business Sales, or the business' staff, customers or suppliers without prior arrangement with Tabak Business Sales and to refer all queries through Tabak Business Sales;
  5. We acknowledge that Tabak Business Sales is the introducing agent, and that all offers and deposits for the business, shares or property will be conducted through that office;
  6. If, I as a potential buyer breach clause 4 of this agreement and buy directly or indirectly this business from the Vendor of the business quoted then I the buyer will be responsible for any loss of commission due to Tabak Ltd (Licensed under REA 2008) and/or Tabak Business Sales Limited (Licensed under REA 2008) as the case may be;
  7. If, I as a potential buyer breach clause 1, 2 or 3 of this agreement I undertake to indemnify Tabak Business Sales against any actions, proceedings, costs, claims, demands or liabilities which you may suffer in consequence of that breach;
  8. That all information is received for no other purpose than the evaluation of the investment potential of the business;
  9. If I decide not to proceed with the investment, I agree to immediately return to Tabak Business Sales all written information supplied by it and retain no copies and to delete any electronic records including all emails and attachments relating to the business(es);
  10. Acceptance by Electronic Mail: Execution of this Agreement and transmission between the parties by electronic signature and email response each to the other or their representative will constitute offer and acceptance and satisfy the requirements of Section 5 of the Electronic Transactions Act 2002.
  11. Privity: For the purposes of Part 2, Subpart 1 of the Contract and Commercial Law Act 2017, the parties acknowledge and agree that the agreements and undertakings given by the recipient in this Confidentiality Agreement are given for the benefit of the Vendor and its related companies and representatives, and are enforceable at the suit of all or any of them.

Before proceeding with this Confidentiality Agreement, it is recommended that any prospective purchaser

  1. seeks legal advice.
  2. may or may need to seek technical or other advice and information.
  3. review Tabak Business Sales’ internal process in relation to any complaints.  A copy of these can be found here.
Mandatory Fields*