What a Buyer Checks First
- Customer list, contract terms and share of sales from the largest account
- Food safety audits, inspection reports and any recalls
- Equipment age, line capacity and the cost to replace key machines
- Ingredient cost trends and how price changes reach customers
- Who owns the recipes, brand names and packaging designs
Customers Come First
Buyers start with who buys the product. A plant that sells to a grocery chain on a loose purchase order is worth less than one with a signed supply agreement and several accounts.
Co packing work for other brands can fill a plant, but buyers will ask what happens if a brand moves production.
Inspections and Safety Records
A clean audit history is worth real money. Buyers ask for third party audit results, inspection reports and a log of customer complaints and recalls, and they read them closely.
A weak record means a buyer must budget for fixes, and that cost comes off the price.
Equipment and Capacity
Lines, ovens, chillers and packaging machines sit at the center of the plant. A buyer wants to know what runs near capacity, what is aging and what replacement costs. An equipment appraisal prepared before listing saves arguments later.
If you own the building, the real estate may need its own plan. A lease at a fair rent is easier to sell than an informal arrangement.
Margins and Inputs
Ingredient and packaging costs move with the market. Buyers look at whether past increases reached customers on time. Thin margins that cannot absorb a bad year lower the multiple.
Most plants sell their assets rather than their shares. Our guide on an asset sale or stock sale covers what each choice means for the seller.
Preparing the Plant
Collect audit reports, supplier agreements, customer contracts and three years of cost of goods detail before you list. A buyer's lender will ask for the same pile, so having it ready saves weeks.
See also successor tax liability, then ask for a confidential estimate.