Selling an Industrial Coatings Business: The Pro-Tec Coatings Deal

Specialty industrial businesses like coatings sell on their formulations, their equipment, and their repeat customers. A real example from M&A Business Advisors is Pro-Tec Coatings, a protective coatings business, where M&A Business Advisors represented both sides and sold to a strategic buyer. Here is what selling a coatings or specialty industrial business looks like.

The deal

A strategic buyer in the same space can absorb the formulations, equipment, and customer base into an existing operation, which often supports a stronger price for a specialized business.

How specialty industrial businesses are valued

Like most businesses under $5M, these sell on a multiple of earnings, either Seller's Discretionary Earnings (SDE) for smaller owner-operated shops or EBITDA for larger, management-run companies. The exact multiple varies by the specifics below, so treat any range as a starting point, not a quote.

Here value tracks proprietary formulations or processes, repeat industrial customers, equipment, and margin. Specialized, hard-to-replicate work values higher than commodity application.

What buyers look for

• Proprietary formulations, processes, or approvals.
• Repeat industrial and commercial customers.
• Well-maintained equipment and documented quality control.
• Low customer concentration and clean books.

Getting ready to sell

Protect and document what makes your process defensible, diversify your customers, and keep clean books. Then get a real valuation. I help owners prepare.