Valuations
What Is My Machine Shop Worth?
Machine shops and precision manufacturing businesses are in strong demand from PE firms, strategic acquirers, and individual buyers. The combination of skilled labor barriers, specialized equipment, and sticky customer relationships creates defensible business value.
Typical Valuation Ranges
Most machine shops sell for 3x to 5x SDE or 4x to 7x EBITDA for larger operations.
Factors that push toward the higher end:
- Modern CNC equipment (5-axis, multi-axis)
- Diversified customer base (no client over 15% of revenue)
- ISO 9001 or AS9100 certification
- Skilled machinists with strong retention
- Repeat order base from established customers
- Revenue above $2M with consistent growth
- Aerospace, medical, or defense capabilities
Factors that push toward the lower end:
- Manual equipment only (no CNC)
- Owner is the primary machinist
- Customer concentration (one client is 25%+ of revenue)
- Job shop mentality (no repeat business)
- Aging equipment needing replacement
- No quality certifications
Key Value Drivers
Equipment quality and age: Modern multi-axis CNC machines are expensive ($200K–$1M+ each) and represent significant asset value. Buyers evaluate your equipment list closely.
Customer diversification: This is the biggest risk factor buyers evaluate. Shops dependent on one or two OEM customers face severe discounts.
Workforce: Experienced CNC programmers and machinists are extremely hard to find. A stable, skilled team is a premium asset.
Certifications: ISO 9001, AS9100 (aerospace), ITAR (defense), and ISO 13485 (medical) open high-value customer segments and take years to achieve.
How to Increase Your Value
- Invest in CNC. Multi-axis machining capabilities attract higher-value work and better margins.
- Diversify customers. Actively pursue new accounts to reduce concentration.
- Pursue certifications. ISO 9001 is foundational; AS9100 opens aerospace.
- Retain your machinists. Competitive pay, apprenticeship programs, and good working conditions keep skilled talent.
- Build a management team. Shop foreman, quality manager, and estimator roles should exist independent of the owner.
Browse the valuation multiples guide for industry data, or schedule a free call for a confidential valuation.
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