The index is buyer types. The long pricing table is how each buyer type prices a manufacturer. This page scores the three classes sellers actually fight about.
| Criterion | PE add-on | Strategic | Individual / SBA |
|---|---|---|---|
| First number | Adjusted EBITDA after a real GM | Contribution after their overhead | SDE the lender will treat as cash |
| Size habit | Certified, reportable, often above Main Street SDE | Scarce process or overlap, any band they can integrate | EV that fits a $5 million 7(a) |
| Structure habit | Cash plus rollover | More cash; tighter non-compete | 7(a) / 504; standby-note rules |
| Diligence | QoE, quality system, peg, environmental | Commercial overlap and consents | Tax returns, serials, personal credit |
| Calendar drag | QoE and add-on integration memo | Consents, novation, culture | Packaging and injection math |
| Walks when | No second chair; lapsed cert; one handshake customer | Consent risk; you have no alternative | Loan will not fit the box or DSCR |
| Leakage risk | Associate with a phone on the aisle | Competitor already in the book | Local operator who talks at the diner |
| Labor underwrite | Second chair and stay plan | Who they will keep after integration | Buyer can stand in the quote desk |
| Climate use | CIM weather only | CIM weather only | Lender reads cost pressure too |
ISM’s August 2026 PMI was 54.6 with a Prices Index of 71.1 (Source: ISM). Fed G.17 manufacturing utilization was 76.0% in July 2026 (Source: Fed G.17). Use those sentences as operating context. Do not invent a 2026 PE premium from them.
Which earnings base does each buyer believe?
A PE add-on rebuilds adjusted EBITDA. Owner perks that will not transfer need paper. A replacement general manager who is not already in the number gets subtracted. Selling to PE add-on platforms is the process page. This row is the earnings row.
A strategic believes contribution after their own overhead. They will pay for a certificate or a customer they cannot hire in a year. They will also underpay if they think you have nowhere else to go. Selling to a strategic acquirer is the commercial page.
An individual believes SDE after a replacement wage. Main Street manufacturing in BizBuySell’s 2021–2025 set cleared at 2.75x median SDE on about $268k of earnings (Source: BizBuySell / Iconic). Selling to an individual SBA buyer lives in that room. Manufacturing business valuation still wants the size band named before anyone borrows a cell.
Stanford’s 2024–25 search median of about $16 million at ~6.2x EBITDA on a ~25% margin company is a study profile, not a PE rate card and not a job-shop law (Source: Stanford GSB).
What size band can each class actually close?
Individuals who need 7(a) live inside a $5 million loan cap and a 10% injection under SOP 50 10 8 (Source: SBA). Fees and the peg count. A $12 million enterprise value does not become a 7(a) story because the buyer likes the certificate.
PE add-ons show up when EBITDA is reportable and the platform thesis is real. This site will not invent a firm name or a “typical add-on check.” If the file is a $400k-SDE quote desk, “private equity” is vocabulary, not a buyer.
Strategics can appear in more than one band when the capability is scarce. Scarcity is a customer, a process, or a live certificate. It is not a slogan on a teaser.
How does structure differ across the three?
PE often wants cash plus rollover. Vesting, drag, and information rights are counsel’s paper. This is not investment advice.
Strategics often pay more cash and write a tighter non-compete. Enforceability is state-specific. Counsel drafts it.
Individuals often need 7(a) or 504. A seller note counts toward the 10% injection only on full standby — no principal and no interest — for the life of the 7(a), and only up to half the injection (Source: SBA). Current-pay paper is a different instrument. Write which one you mean.
How deep is diligence, and who pays for it?
PE budgets quality of earnings, a quality-system review, and a manufacturing peg. The seller who treats those as insults will exclusive with the wrong class.
Strategics may spend less on financial engineering and more on commercial overlap, consents, and whether the plant survives integration. They still open tax returns.
Individuals open tax returns, add-backs, serials, liens, and personal credit. They should not get customer names in week one. Buy a manufacturing business is the buyer pillar when the reader is the operator.
How does the close calendar differ?
BizBuySell’s 2025 manufacturing median time to close was 223 days (Source: BizBuySell). SBA packaging is one reason individuals linger. QoE and add-on memos are why sponsor files linger. Consents and novation are why strategic files linger. None of those clocks is a promise on your plant.
If you need a thirty-day close, say so on the first call. Some classes cannot meet it. That is a structure fact, not a personality complaint.
What makes each class walk?
PE walks on a missing second chair, a lapsed certificate, or a handshake book that is one customer. They also walk when orderly liquidation value plus clean net working capital already exceeds the earnings story and nobody will admit it.
Strategics walk when anti-assignment clauses will not budge and you have no alternative process. They also walk when the “scarce” capability is a commodity they can staff.
Individuals walk when the loan will not fit the box, global cash flow fails, or the injection is folklore. Affiliation can block a sponsor wearing an individual hat. Eligibility is the lender’s lane.
How does leakage risk differ on the tour?
A PE associate with a phone on the aisle is a rumor machine. Script the visit. No unescorted wandering.
A strategic who already buys from you has leverage and leakage in the same sentence. Stage disclosure. Do not hand them the rest of the book because they “already know the market.”
An individual who lives in the same county talks at the diner. Blind the teaser. Keep unique facade photos out. Sell my manufacturing business is the confidentiality spine.
IBBA’s 83% three-offer statistic on deals over $5 million is an argument for a parallel process, not a promised bid count on a $400k-SDE shop (Source: IBBA).
What second-chair and labor facts do they underwrite?
BLS OEWS May 2025 median pay was $58,750 for machinists and $53,750 for welders (Source: BLS OEWS). Those are labor-context figures, not a staffing plan. PE wants a named number two. Strategics want to know who they will keep after a consolidation conversation. Individuals need to know whether they can do the owner’s Monday — quoting, purchasing, and signing checks — or whether the loan must carry a hire.
Deloitte and The Manufacturing Institute still publish 3.8 million hires needed this decade and 1.9 million potentially unfilled (Source: Deloitte/MI). A slide roster is not a second chair.
Who should choose a PE add-on process?
Choose a PE door when adjusted EBITDA is already reportable, a second chair exists, the certificate is live, and you can live with rollover math that counsel will read. Run it in parallel with at least one other class when the file can support it. Do not choose PE because a neighbor used the phrase.
Who should choose a strategic process?
Choose a strategic door when a named capability is scarce to a competitor or a customer who cannot staff it in a year. Keep names last. Write consents into the letter. Price the risk that they will not keep the plant. Do not choose a strategic exclusive in week one because the first call felt flattering.
Who should choose an individual buyer?
Choose an individual door when enterprise value, fees, and the peg fit the 7(a) box, the buyer can personally guarantee, and no scarce certificate would draw a better class. Invite more than one operator when you can. Do not choose this door as the only name on a certified $4 million-EBITDA file that a strategic or add-on would pay for.
Educational information only. Jason Taken is a business broker with HedgeStone Business Advisors. He is not an appraiser or a securities dealer. This site names no PE firms. The conversion path is a confidential intro call.