November 14, 2025 – Thomas J. Emmerling, PhD, CFA^®, CVA^® recently authored a guest column in Business First of Buffalo and the Albany Business Journal.

How Manufacturers Can Maximize Value in Today’s M&A Market

For owners of manufacturing companies, the evolving tax and financing landscape is creating new considerations for how to grow, position, or eventually transfer their business. The One Big Beautiful Bill Act (OBBBA) and the Federal Reserve’s interest-rate cuts in September and October of this year are shaping the environment for mergers and acquisitions (M&A), affecting both valuations and financing dynamics. While favorable market conditions may exist, the companies that capture the most value will be those whose owners approach a sale deliberately, strengthening the business and planning strategically before going to market.

Understanding the Market Forces

Two primary forces are influencing manufacturing M&A today. First, OBBBA provides significant tax incentives that can improve cash flow and enhance valuation. The 100 % bonus depreciation for qualified equipment allows businesses to immediately expense large capital investments, effectively improving after-tax cash flow—a key metric that buyers use to assess value. Additional provisions, including deductions for qualified production property, research and development expenditures, and the 20 % Qualified Business Income deduction for pass-through entities, further enhance a company’s financial profile. Collectively, these measures make manufacturing businesses more attractive to buyers by highlighting both efficiency and future growth potential.

Second, the Federal Reserve’s recent rate cuts create an environment for lower borrowing costs, improving access to debt for strategic buyers and private equity firms. Reduced financing costs expand the pool of potential buyers and may accelerate deal execution. Together, these forces—tax incentives and lower interest rates—create conditions in which well-prepared companies can command higher valuations, attract more competitive bids, and achieve smoother transactions. Understanding these market forces is essential for owners seeking to time their exit or position the company for strategic growth.

Strengthening the Business Before Going to Market

Preparation is critical to fully capitalize on these market conditions. One of the most effective steps is a sell-side quality of earnings (QOE) review, which provides prospective buyers with confidence in the reliability and sustainability of reported earnings. For manufacturing firms, a QOE can also identify areas where cost structures, margins, or revenue recognition practices may need refinement, allowing owners to address issues before they affect valuation.

Beyond a QOE, owners should ensure that capital assets, R&D initiatives, and depreciation schedules are structured to maximize OBBBA benefits. Clear, organized financial reporting, well-documented operational processes, and evidence of consistent performance signal to buyers that the business is well-managed and lower-risk. This preparation can improve both pricing and terms and reduces the likelihood of unexpected issues arising during buyer confirmatory due diligence.

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Strategic Exit Planning

Exit planning in today’s environment is a deliberate, multi-faceted process. Owners should carefully assess not just the timing of a sale, but also how to present the business, structure the transaction, and align the process with long-term personal and financial objectives. Engaging financial, tax, and M&A advisors early allows owners to model after-tax cash flows, evaluate different transaction structures, and identify ways to optimize outcomes. A well-considered exit strategy also provides flexibility, enabling owners to respond effectively to changing market conditions or unexpected buyer considerations.

Looking Ahead

The combination of favorable tax incentives, accessible financing, and a well-prepared, thoroughly documented business creates a unique opportunity for manufacturing owners. Those who approach the market thoughtfully—strengthening operations, validating earnings, and planning strategically—can maximize value, reduce risk, and achieve a smoother transaction process. In the current environment, deliberate preparation and strategic foresight are just as important as market timing. For owners willing to invest in both, the potential to capture value and position the business for future success is substantial

For more information, contact Thomas J. Emmerling, PhD, CFA^®, CVA^® at tjemmerling@dopkins.com.

To read the article on the Business First of Buffalo website, click here.  

Dopkins Capital Advisors provides clients with comprehensive services covering mergers and acquisitions, business valuations, and business exit planning and execution. Our team of financial professionals, with focused expertise in accounting, tax advisory, investment banking, and wealth management, create a leverageable ecosystem to provide a full suite of capital advisory services.

Dopkins & Company, LLP also offers comprehensive accounting, auditing and tax services, forensic accounting, outsourced accounting, as well as wealth management consulting, internal audit support and capital advisory services to privately held and public companies, not-for-profit organizations and individuals.

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About the Author

Thomas J. Emmerling PhD, CFA®, CVA®

Tom counsels clients in exit planning and mergers and acquisitions, helping them navigate the complex and often lengthy process as businesses are transitioned to new ownership.