You've Had an Offer for Your Engineering Business. Is It Fair?
The letter names a price. It does not tell you how much of that price you will receive, or what a buyer who wanted it less would have offered. An independent valuation tells you both, in two working days, before you reply.
Most owners of machining and precision engineering companies come to us at one of a few moments. A competitor or a private equity firm has made an approach. A management team wants to buy. A partner wants out and someone has to name a number. Or the owner is planning retirement and has no idea whether the business funds it.
In each case the first number on the table comes from someone with a reason to pick it. The owner is the only party in the room without a valuation of their own.
Email Mark for a free discovery callSee what a valuation report containsWhat finding out late costs
An illustrative CNC machining business with £8.0m turnover and reported EBITDA of £1.30m. The owner had heard that engineering businesses sell for seven times EBITDA and expected about £9.1m. The company and every figure are fictional.
| Reported EBITDA | 1,300 |
| Owner salary raised to a market-rate managing director | (70) |
| Spouse salary with no operational role added back | 45 |
| One-off legal costs added back | 30 |
| Gain on sale of old machines removed | (60) |
| Rent to the owner's SIPP set at market rate | (35) |
| Maintainable EBITDA | 1,210 |
| Enterprise value at an illustrative 5.0 times | 6,050 |
| Cash at completion | 900 |
| Hire purchase on machines | (750) |
| Bank loan | (300) |
| Working capital below the normal level | (120) |
| Equity value to the owner | 5,780 |
The gap between £9.1m and £5.8m comes from the two things owners most often miss. The quoted multiple described larger businesses, and hire purchase on the machines was always going to come off the price. The 5.0 times multiple is for illustration only. A real valuation sets the multiple from the evidence in your business and comparable transactions.
Why the numbers you have been given are not neutral
Every valuation an owner hears before a sale comes from someone with a stake in the answer.
The buyer
wants to pay as little as you will accept. Their first figure is an opening position, and their advisers know your sector's discounts better than you do.
A broker
competing for your instruction has a reason to quote high. A large number wins the mandate. Whether the market agrees comes out months later, usually in due diligence.
Your accountant
knows your numbers better than anyone, but may never have taken a business through a sale or sat across from a buyer's due diligence team.
None of them is acting in bad faith. Each one is answering a different question from the one you are asking, which is what the business is worth to a buyer today and how much of that reaches you.
Why our valuation is independent
When we value your business, we have no reason to push the number up or down. The fee is fixed and agreed before any work starts, and it is the same whatever the number turns out to be. You are not signing up to a sale, and nothing in the engagement commits you to anything further.
The report is yours. Show it to a buyer, your bank, your accountant or your family. Every figure in it traces back to one of three valuation methods, with each adjustment explained in the Excel model you receive alongside it.
Owners rarely go on to ask us to sell their business after a valuation, although it has happened. Most come to us for the reason this page exists. They want a number they can trust before someone else tells them what it is.
Who does the work, and what a valuation finds
Mark Ross Roberts FMVA CBCA carries out every valuation himself, with 30 years on the deal side of UK mid-market transactions. The largest corporate group he has negotiated against had a turnover of £3.2bn.
96%
In 96% of completed Achieve mandates, the price agreed at heads of terms is the price paid at completion.
Source: Achieve Corporation mandate records
The two summaries below show the kind of finding a valuation produces. They are examples written for this page, not records of real mandates, and they carry that label on the website until real anonymised deals replace them.
Aerospace and defence machining, Midlands
- Turnover
- £6m to £8m
- Buyer
- A private equity-backed engineering group
- What the valuation found
- EBITDA had risen for three years while machine replacement was deferred. The buyer's opening price applied a multiple to those flattered earnings. The valuation costed the capital expenditure shortfall, so the owner disclosed it on his own terms before due diligence found it.
- Outcome
- The price agreed at heads of terms was the price paid at completion.
Subcontract machining for medical devices, North West
- Turnover
- £3m to £5m
- Buyer
- An overseas strategic buyer looking for a UK site
- What the valuation found
- The owner had valued the business on EBITDA alone. The ISO 13485 approval and the qualified part numbers were the reason the buyer wanted it, and the valuation set out the time and cost the buyer would face to win them independently.
- Outcome
- The owner negotiated from his own evidence of what the approvals were worth, before the first offer was answered.
What buyers pay for in precision engineering
Trade buyers and private equity both pay a premium for earnings they can see continuing. In precision engineering that comes from a short list of things, and most of them are visible in a data room within a day.
- Approvals that took years to win. AS9100 for aerospace, ISO 13485 for medical devices and customer-specific approvals from defence primes act as a barrier to entry. A buyer cannot recreate them by buying machines. Crowe's September 2026 review of UK precision manufacturing deals names accreditations as a driver of higher multiples where barriers to entry are high.
- Spread across end markets. A shop that serves aerospace, medical and energy customers carries less risk than one that depends on a single sector, even when the margins are similar.
- Long-running part numbers. Repeat work on qualified parts, often for the life of a platform, is worth more than jobbing work won on price each month.
- A machine park that does not need replacing the year after completion. Five-axis and multi-tasking capacity bought in the last few years supports the forecast. Machines past their useful life become a capital expenditure demand that the buyer deducts from the price.
- A second tier of management. A works manager, a quality manager and programmers who run the business day to day without the owner on the floor.
What pulls the value down
The discounts in this sector are predictable. Buyers apply them because they have been caught by each one before.
- One customer carrying a large share of sales. Buyers price the risk of losing that account. Where it dominates turnover, part of the price is often deferred and tied to that customer staying.
- The owner still writes the quotes and holds the key relationships. If the main customer contacts ring the owner's mobile, a buyer assumes some of that revenue leaves with the owner and prices accordingly.
- Material costs that cannot be passed on. Fixed-price contracts written before the steel, titanium and aluminium price rises of recent years show up as margin erosion. Buyers check whether your contracts carry price adjustment clauses.
- Deferred capital expenditure. Old machines kept running with a good maintenance record still count as a replacement bill the buyer will fund after completion.
- Thin quality systems. A non-conformance history with a major customer, or an approval held on paper but rarely audited, is found in due diligence and used to renegotiate.
Most of these can be fixed, or at least evidenced, given twelve months' notice. A valuation done early shows which ones apply to your business and roughly what each is costing you in price.
How we value a precision engineering business, and why the multiple comes last
Anyone can take a year's EBITDA from the filed accounts and multiply it by a number from a newspaper. A buyer's advisers will not price your business that way, and neither do we. The multiple is the last thing we set. It comes out of the work below and differs for every business, so we do not publish a typical range.
Before any multiple is applied, we test the business on:
- Its defensible moat. What stops a competitor, or a customer's own machine shop, from taking the work? Approvals, proprietary processes, long-life part numbers and the cost to a customer of re-qualifying a new supplier.
- The market around it. A PESTLE review of the political, economic, social, technological, legal and environmental pressures on its end markets, such as defence budgets, aircraft build rates, reshoring and energy costs.
- Its competitive position. Porter's Five Forces applied to the business itself: the power of material suppliers, the buying power of large OEM customers, the threat of new entrants, substitutes such as additive manufacturing, and rivalry for the same contracts.
- Its real competitive edge. The specific reason customers choose this shop, and whether that reason survives the owner stepping back.
- Capital expenditure. The age and condition of the machine park, and what must be spent to make the forecast achievable.
- Frameworks and contracts. Framework agreements, long-term supply agreements and approved-supplier status, and how much of next year's revenue they already cover.
- Quality of earnings. Whether profits in the years before a sale were flattered by holding back capital expenditure, maintenance or training. Rising EBITDA alongside an ageing machine park is the pattern buyers look for, and they find it.
Only then do we value the business three ways: on maintainable earnings, on a discounted cash flow of its own forecast, and on the net value of its assets. Where the methods disagree, the gap shows where a buyer will push.
On published multiples. BDO's Private Company Price Index put the average UK trade buyer multiple at 9.8 times EBITDA in Q3 2024, and 12.2 times for private equity (BDO, PCPI Q3 2024). Over the previous four years, the trade deals behind that index averaged an enterprise value of £14.5m (BDO, PCPI Q1 2024). An average built from larger businesses says nothing about your moat, your machines or your contracts. We use such figures only as one cross-check against the result of the work above.
We value businesses up to £450m enterprise value. The fixed fees below cover businesses with turnover from £500k to £30m, and larger businesses are scoped on the discovery call.
Where precision engineering accounts mislead
Filed accounts for engineering companies hide several things a buyer's accountants will find. We correct for them before anyone else does.
- Capitalised tooling and fixtures. Some shops capitalise customer-specific tooling, which flatters EBITDA. A buyer reverses it and reprices.
- Work in progress valued at selling price. Long-lead aerospace and defence parts can sit in WIP for months. If the year-end WIP includes margin not yet earned, profit is overstated.
- Machine sale profits. Gains on selling old machines are one-off. They are taken out of maintainable earnings.
- Family on the payroll, or missing from it. A spouse paid for no role is added back. An owner who draws a low salary and takes dividends needs a market-rate manager costed in their place.
- Rent paid to the owner's pension scheme. If the premises sit in a SIPP and the rent is below market, the buyer will set it at market after completion, and earnings fall by the difference.
- Research and development tax credits. Credits received are real cash, but buyers treat them as uncertain. We show earnings with and without them.
The valuation, the fee and how to start
You receive a valuation memorandum, a written report and a locked Excel model, delivered in 2 working days. Mark Ross Roberts FMVA CBCA does the work himself. Nothing is passed to a junior analyst.
| Annual turnover | Independent valuation | With funding feasibility |
|---|---|---|
| £500k to £5m | £1,200 | £1,700 |
| £5m to £10m | £2,000 | £2,500 |
| £10m to £30m | £3,000 | £3,500 |
| Above £30m | Scoped on the call | Scoped on the call |
All fees exclude VAT. Funding feasibility adds the bank debt a lender is likely to advance against the business and tests deal structures on debt service cover, which matters if you are selling to a management team or buying a competitor.
How to start: email Mark at mark@achieve-corporation.com with a line on the business and what the valuation is for. You get a reply the same day, then a free discovery call that confirms the right report, the fee and the turnaround. Nothing is payable until you agree to go ahead.
Email Mark for a free discovery callFrequently asked questions
I've had an offer for my engineering business. How do I know if it's fair?
Compare it with an independent valuation built from your own accounts, before you reply. The valuation shows what a buyer is likely to pay, how much of the headline reaches you after debt and working capital, and which parts of the offer are open to negotiation.
Is an independent valuation worth it if I already have a broker's figure?
A broker's figure is often given to win your instruction. An independent valuation has no stake in the number, shows every adjustment, and gives you something to test the broker's figure against. At a fixed fee from £1,200 excluding VAT, it costs less than one point off the multiple on almost any deal.
Will you try to sell me a sale mandate afterwards?
No. The valuation is a standalone engagement at a fixed fee, and you are under no obligation to instruct us for anything else. Most owners use the report to negotiate with a buyer they already have, or to plan their next few years.
How much is my precision engineering business worth?
There is no reliable rule of thumb. The value depends on how defensible the business is, the state of its machine park, the contracts and approvals behind next year's revenue, and whether recent profits are real. A multiple of EBITDA comes at the end of that work, followed by deductions for debt and working capital at completion. Published averages describe larger, different businesses.
Do accreditations like AS9100 increase the value?
Yes, where they protect revenue. An approval that keeps you on a customer's qualified supplier list for the life of a part is worth more than one held but rarely used. Buyers check the audit history.
How does customer concentration affect the price?
The more turnover depends on one customer, the more a buyer discounts the price or defers part of it until that customer is shown to stay. The valuation measures the exposure and shows what it is likely to cost you.
Is hire purchase on my machines deducted from the price?
In almost every deal, yes. Hire purchase and finance leases are treated as debt in a cash-free, debt-free price, so they reduce the amount you receive.
How long does a valuation take?
Two working days from receiving your accounts and management information, at a fixed fee agreed before work starts.
Can you value a business for a management buyout?
Yes. Choose the valuation with funding feasibility, which shows the bank debt a lender is likely to advance and whether the management team's deal structure can be serviced.
Is the valuation confidential?
Yes. An NDA is available before you share any figures, and your staff, customers and suppliers are not contacted.
Sources:
- BDO, Private Company Price Index Q3 2024
- BDO, Private Company Price Index Q1 2024
- Crowe, UK precision manufacturing M&A market, September 2026
Valuation guides: EBITDA analysis · Earnings multiples · Asset-based valuation · Discounted cash flow
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