Manufacturers Distrust Private Equity Buyers as They Retire

A Forbes report identifies a significant challenge facing American manufacturing: a large number of Small and Medium-sized Enterprise (SME) owners, predominantly from the Baby Boomer and Generation X cohorts, are nearing retirement and looking to sell their businesses. While private equity (PE) firms are natural buyers, a widespread distrust presents a considerable barrier. Matt Guse of MRS Machining offers critical insight into this dynamic, asserting that PE firms frequently overlook that they are acquiring a legacy, not merely an asset. He argues that buyers often approach these transactions with generic strategies and low valuation multiples, treating them as straightforward financial deals. According to Guse, this perspective disregards the profound personal investment owners have in their businesses, which includes "decades of hard work, community, and identity." This skepticism is not new. The report also references the work of supply chain veteran Jeff Leimbach, author of "Broken Supply Chains." Leimbach provides historical context, suggesting that the distrust manufacturing owners harbor towards financially motivated buyers is a persistent issue with roots stretching back decades.