MMCC Acquires Computech To Diversify Product Offering

May 2010       Download PDF      Print

Client Objective

Charlie Barton joined Kansas City-based Computech Manufacturing Company as a co-owner in the early 1990s after serving as the Director of Manufacturing for a multi-billion dollar company. Computech, a manufacturer of specialized automation systems and equipment, was originally established in 1987 by Bob Aldrich with the help of his brother, Charlie Aldrich.

After arriving at Computech, Barton used his expertise to help transform the company’s manufacturing capabilities to include design and build services for more complex equipment. Computech grew significantly over the next 20 years as it continued to expand its product offering. The Aldrich brothers became less involved in the company as they neared retirement age, but Barton remained actively involved in the company’s day-to-day operations.

In 2009, the Aldrichs decided to exit the business and retire. However, Barton wanted to retain his role as President and continue running the company. Ultimately, the owners decided to find a buyer for Computech who would not only retain the company’s existing employees, but also allow Barton to continue serving as President.

Solution

Computech’s three owners approached Allied Business Group and expressed their interest in selling. We discussed the owners’ goals and presented the various exit options that would help them achieve their objectives. As a first step, we performed a business valuation that helped our clients develop a clear understanding of their company’s value and establish realistic sale price expectations. This analysis also helped identify various strengths and growth opportunities that would make Computech attractive to prospective buyers.

We then developed a strategic marketing plan centered on these characteristics and began designing confidential marketing materials, including a one-page blind prospectus and a confidential information memorandum. Next, we conducted an exhaustive, yet targeted, search for larger precision manufacturing companies with an interest in pursuing strategic growth. Finally, we solicited interest from key executives at each company through direct mail and e-mail marketing campaigns.

Through this process, we contacted Melton Machine and Control Company (MMCC), a manufacturer of automated arc welding machines used primarily in motor vehicle production. After a decline in the auto industry, MMCC was seeking to diversify by entering into new markets and expanding its manufacturing capabilities. Consequently, Computech’s strong presence in the aerospace, pharmaceutical, and agricultural industries made it an attractive investment opportunity.

Result

Allied Business Group completed the sale of 100% of Computech to MMCC in May 2010. The acquisition provided MMCC with the diversification it needed to succeed going forward. By combining resources, the companies were able to win larger projects, reduce costs, and improve the quality of their products and services. Additionally, MMCC retained all of Computech’s existing employees and allowed Barton to continue running the company.

About Computech

Founded in 1987, Computech Manufacturing Company provided custom manufacturing, specializing in the design and manufacture of complex automation systems and equipment. Computech Manufacturing Company also produced precision parts for the aerospace industry, leveraging the company's TSQP and ISO 9000 certifications.

About Melton Machine & Control Company (MMCC)

MMCC, located in Washington, Missouri, is a manufacturer of automated arc welding machines for the automotive industry. MMCC was in need of product and industry diversification after the decline in the automotive industry.