The Starting Point
A precision manufacturing company: $42M annual revenue, 11% EBITDA margin, 67% customer concentration in top 3 accounts, founder working 70+ hour weeks.
The 24-Month Transformation
Months 1-6: Foundation
Implemented customer profitability tracking, raised prices on unprofitable lines, began documenting tribal knowledge into SOPs.
Months 7-12: Leadership
Key hires: COO with manufacturing M&A experience, VP of Sales, CFO upgrade. Founder reduced to 45 hours/week while revenue grew 18%.
Months 13-18: Optimization
Lean manufacturing, customer diversification (reduced top 3 concentration to 44%), technology investments. EBITDA improved from 11% to 18%.
Months 19-24: Transaction
Competitive process with 6 strategic buyers and 3 PE firms.
Final Outcome: Sale price: $102M. Multiple: 7.8X EBITDA (vs. 4X industry average). Founder retained 20% stake.
The Lessons
The valuation premium came from management team quality, margin improvement, customer diversification, and operational documentation.