From First Questions to First Deals: Navigating Machine Shop Acquisitions, Ep #28

When you're buying a machine shop for the first time, it's easy to feel like you're lost in the dark. I've been through more than 150 transactions in my career, but I still remember what it was like sitting across from my first seller—wondering if I was asking the right questions or if I was missing something important. That's why I love conversations like this one. In this episode of Buy the Numbers, I sit down with Jeff Lee, Operations Manager at Hayer Engineering in Singapore. Jeff reached out after listening to some of our episodes on acquisitions, and the quality of his questions made me realize they weren't just for him—these are the same questions countless first-time buyers wrestle with but rarely get answered. Jeff shares his story of joining his family's 30-year-old oil & gas machining business, beginning the search for potential acquisitions in the region, and running into the roadblocks that every buyer faces: how to evaluate opportunities, when to buy assets versus equity, and what really happens when you integrate a new shop. As we work through his list, I pull from my own playbook—what I look for in a shop, how I handle customer concentration, and why 'people' issues almost always end up being the biggest surprises. Whether you're on your first acquisition or your fiftieth, I think you'll find this conversation valuable, practical, and maybe even a little reassuring. You will want to hear this episode if you are interested in… (0:43) Jeff Lee's background and path to Hayer Engineering (3:00) Why pursuing deals can feel lonely and stressful (5:13) The characteristics I look for in a shop (7:47) Verdant Commercial Capital makes the process smooth & easy (8:25) What my acquisition strategy looks like: diversification and capabilities (11:08) Asset vs. equity deals and what transfers (14:13) Handling customer concentration risks (16:00) Declining revenue: neglect or market forces? (19:25) CapEx spending and owner age as indicators (21:18) Implementing a tech stack post-acquisition (23:53) Level up your workholding with SMW Autoblok  (24:34) Onboarding employees and infrastructure quickly (27:01) Centralization vs. decentralization decisions (30:17) Managing customer relationships across shops (31:23) How people issues as the biggest surprises (33:58) Valuation approach and doubling value (39:54) Leveraging your strengths in due diligence (43:49) The future of machining: consolidation and automation (49:51) Grow your top and bottom line with CLA Resources & People Mentioned Episode #24: Demystifying the Buying and Selling of Machine Shops Episode #80: How to 4x Your Money with Machine Shops Verdant Commercial Capital makes the process smooth & easy ProShop ERP Datanomix Level up your workholding with SMW Autoblok  Grow your top and bottom line with CLA Connect with Jeff Lee Hayer Engineering Connect on LinkedIn Connect With Buy the Numbers Follow on LinkedIn Connect with Mike Payne on LinkedIn Subscribe to Buy the Numbers on Apple + Spotify Audio Production and Show Notes by - PODCAST FAST TRACK