Ben Bryer·November 16, 2023

Buying a $4m Manufacturer with a Conventional Loan | Ben Bryer Interview

Ben Bryer, a former Vanguard credit/structured-products analyst turned NYU MBA and self-funded searcher, spent well over a year and roughly $150,000 chasing a Precision sheet metal manufacturer deal that collapsed after combining a real-estate purchase with heavy environmental diligence and an increasingly hostile seller - a failure that left him broke, borrowing from his parents, and doing Upwork freelance consulting to get by. Backed informally (no written terms, just a handshake) by mentor and equity investor Steve G, Ben pivoted to Meyer Gage Company, a 65-year-old, ~$3.5-4m revenue manufacturer of precision pin gauges used for pass/fail quality inspection of machined holes, which he was drawn to for its oligopolistic industry structure, lack of price competition, and decades-long sticky customer relationships. He closed the deal in February 2023 using a conventional bank loan (not SBA) layered with a seller note and a mezzanine/junior capital piece from Steve, explicitly avoiding SBA 7(a) financing because of its rigid personal-guarantee and structuring constraints. Post-close, a hired CEO/operations lead didn't work out, forcing Ben - with zero manufacturing background - to step into day-to-day leadership, leaning heavily on long-tenured employees (some with 20-30+ years at the company) who stepped up. He reflects candidly on underrated diligence risks like ERP/tech-debt and on the emotional toll of a long, expensive search before ultimately landing a niche, defensible business.

Deal facts

sde ebitda: EBITDA-adjusted margins in the mid-20s (percent), on revenue of $3.5-4m
revenue: $3.5m to $4m annually
financing structure: Conventional bank term loan (First Bank of New Jersey, banker Adam Regnery) + seller note + mezzanine/junior capital piece from his investor Steve G (with equity participation); explicitly not an SBA 7(a) loan
notes: 17 total employees (a few part-time); no customer contracts, but top 25 customers unchanged for decades; deal closed February 2023; ~$150k of dead-deal fees from a prior broken acquisition (a Precision sheet metal manufacturer, ~13-18 months of diligence including environmental phase 1/2/3 costs) were later rolled into the economics of the Meyer Gage deal

Why this business

Ben was a self-funded searcher backed by an independent-sponsor mentor/investor (Steve G) who had been quietly pointing him to this manufacturer (Meyer Gage Company, maker of precision pin gauges) for years while Ben was consumed with a different (ultimately failed) deal. After that first deal collapsed, he finally looked closely at Meyer Gage and was drawn to the industry structure: a niche oligopoly of only 5-7 companies nationally making fixed-limit gauges, no dominant competitor, competitors who were simultaneously customers and suppliers, no price competition, decades-long customer relationships with no contracts, and Meyer Gage's unique position as the only company making full class Z and class X pin gauge sets - giving it a durable margin of safety.

What's working

Oligopolistic, low-competition industry structure (only 5-7 companies nationally make fixed-limit gauges) with no price competition
Unique market position: only known company making full pin gauge sets at class Z and class X tolerances
Extremely sticky customer base - top 25 customers unchanged for decades, no contracts needed
Long-tenured, deeply loyal employees (some with 19-33 years tenure) who stepped up into leadership roles when a hired CEO didn't work out
Stable, consistent EBITDA-adjusted margins in the mid-20s year after year, ideal for leverage
Conventional bank financing negotiated through a personal lender relationship, giving more structural flexibility than a cookie-cutter SBA 7(a) loan
Being able to spend time in the business pre-close with the sellers (Al Meyer's sons Jamie and John) to understand the team before buying

What's hard

A prior ~13-18 month deal (Precision sheet metal manufacturer plus real estate) collapsed after ~$150k in due diligence costs, driven by combining a real-estate purchase with tight environmental regulations, an emotionally volatile and physically intimidating seller, and loss of momentum
Ran out of personal savings, borrowed from parents, and did freelance consulting on Upwork to survive financially and emotionally during the gap between deals; described being depressed, isolated, and questioning the venture
Had zero prior manufacturing experience and hired a CEO/operations head post-close who turned out not to be a good fit, leaving Ben to absorb CEO responsibilities unexpectedly
Underestimated tech debt / ERP and financial-reporting systems diligence - wishes he had dug deeper pre-close into whether the seller's systems could support the reporting lenders and investors would require
Balancing seller-relationship preservation against digging into sensitive, uncomfortable diligence areas (like technology) that older sellers often aren't equipped to discuss

Notable quotes

Trying to buy a business and the real estate... trying to buy uh real estate in this you know that's s manufacturing activities on it for a long time in this particular state that has you know very you know tight environmental regulations and laws that's like a full project... I wish that we had focused on like just the business first.

When the seller sort of gets in your face and sort of you know cusses you out... inches away from your face you know just weeks before you're supposed to give that man you know a couple million dollars like that's usually a good indicator like something's wrong here.

I'm you know however old I was you know over 30... with no job um no money and sitting at home uh and I'm like man uh this is pretty bad like this is pretty bad uh should probably turn off the heat because like I need to start you know saving money.

I wanted to find a business where it doesn't compete on price... Myer Gage is currently the only company in the world um that we know of that I can find that produces class Z and class X full pin gauge sets.