jpoint

I think at least parts of this are the way to go. If I can find the energy - I think growing he business to a larger annual revenue might make it more attractive to a larger number of buyers. However, I'm also open to someone who sees the up side and wants to take advantage of that. I think an entity/person that is looking for a pathway into a vendor relationship with car manufacturing would be the ideal buyer. I currently had vendor credentials with Tesla and Lucid. Those relationships are not easy to get.

As for offshoring - I've investigated it a few times and there some savings available but I think the margin increase is not worth sending it off shore. Right now everything in the box - and the box - are made in USA.

chassis

7 years left on patents mean some or all potential buyers will do a discounted cash flow analysis to value the business based on 7 years at roughly your current revenue and EBITDA margin run rate. 7 years is not a big window. Terminal value after 7 years is in question because of the likelihood (uncertainty) surrounding competition which depresses revenue and margin. Uncertainty is bad for investments particularly sale of a business. Terminal value typically has a large influence on enterprise value, which is what the company is worth at any point in time. Bottom line is agreeing on value and therefore price of the business could be difficult. You have sweat equity but this is not a factor in the DCF. Most buyers couldn’t care less what it took to get the business where it is now.

For there to be upside, the buyer has to come with relationships. This means an aftermarket product manufacturer or a Tier 1 or Tier 2 automotive supplier. These would be your target buyers for the business.

You are right that not all representatives to sell a business are a good match. I would seek out a small cap investment banker who focuses on industrials. Do not seek out a “broker”. IB = pros. Brokers = shadetree potentially part time middlemen who “know a few guys”. Brokers are commissioned third party agents no different than someone from Edward Jones, or a real estate agent, or the 20 year old trying to sell you a BMW at the dealer.

You need to lawyer up if you are going to sell the business. A savvy buyer can and likely will create a comprehensive (complex) sale agreement that you need to personally understand down to every comma and apostrophe.

If you haven’t done this already, you need a solid package of financial statements, ideally 5 years of quarterly results, prepared by a competent third party.

How long is the term or duration of the contracts with the casting supplier(s)? What are the price adjustment terms relating to commodity and energy fluctuation?

jpoint

Many valid points here ^^. I think my ideal buyer is one who is already in the automotive space but doesn't have a relationship with an automobile manufacturer and would like one (or two). For example - I was approached about which jack should be supplied for roadside and service center use. Getting access to vendor credentials with an EV manufacturer would be advantageous to an entity that already makes a wide variety of automotive tools or equipment but doesn't have a relationship inside auto manufacturing.

The duration of the patents is a concern but it also provides some time to grow the trademark recognition which might help the long term position of the jack stands in the marketplace. I need to check the extension term I was granted when the first patent was issued. It's not long but I think it's about a year.

I'm a long time lawyer. The initial purpose of going forward with the patents was to use as a basis for teaching patent law. That said - my practice was commercial litigation. I litigated deals that fell apart because of the commas and details that were overlooked or - more likely - were intentionally left ambiguous so the deal could get put together. That probably makes me a terrible deal maker because the transaction attorneys often need the softness of the language to make things work. That's a whole new thread .

chassis

Agreed! …having just left a meeting with our M&A attorneys!

SeymourButts

I'm just curious to know if you've put the brakes on your company. I'd like to buy a pair of stands but they've been out of stock for for quite some time. Will you be offering them for sale any time soon?

jpoint

I am still selling them but we are way oversold. We started supplying Tesla several years ago and it has dominated our production. You can email me to get on the wait list at info@jackpointjackstands.com.

Thanks - John

WillyDaP

Life can be simple, why not reach out to your folks at Tesla and see if they are a buyer !?

And if this very reasonable idea bears fruit I want no money, just send me a full set of stands for my Cayman as a gesture of appreciation, haha!

SeymourButts

Please don’t sell to Tesla - they’ll find a way to screw up the build quality. I got rid of my Model 3 because it was the worst piece of cr*p I’ve ever owned.

jpoint

The unfortunate reality is car manufacturers don't manufacture anything - they assemble parts made by others. Tesla doesn't sell my jack stands, they use them as service tools. So, when they have enough they'll stop buying. In the mean time I have other EV companies looking to do what Tesla does. Gratifying but much more business than I can service at my age. At the same time it's killing my retail business because retail customers think the constant out of stock means I'm not selling anymore when I'm actually selling more than ever. Jackpoint Jackstands needs to grow at a time when I lack the energy to grow it. I can't keep up with current demand at a time when the product is virtually invisible to the public. I don't advertise, my website is terrible and has no SEO functionality, I don't do promotions or sales. I'm just trying to get caught up. If I were 20 years younger this would be the opportunity I'd hoped for. I started the business when I was a full time professor as a small side hustle in my basement. I'm out of the basement now but not in the right place for this product. Someone should be out there using the Tesla business to knock on doors at other EV companies to get Jackpoint on every service floor in the country while someone else should be promoting the retail business to anyone who needs a safe jack stand for personal use. Instead, most days this is a one man show. It's too big for that or at least for me. That's why I need to grow or sell.

subaru335i

I have never seen a Tesla service center but all of the other dealership service centers I have seen have a ton of lifts to jack up cars, how are jackpoints being used in a commercial service center?

In my mind these were always great for the home garage DIYer if you didnt have room for a lift or a quickjack, I have never seen a car on jackstands in a commercial service center.

Or are they just used for mobile service? Because that also makes sense to me.

Sorry if this is a dumb question!

jpoint

Originally the jack stands were acquired for mobile service. However, in a service center there are frequently times when a car needs a wheel off but they don't want to tie up a lift. For example - getting a wheel repaired (Teslas don't carry spares). The stands are also used in body shops that service Teslas - where you really can't effectively use a lift. One other thing - every dealer service center I've ever been in has at least one floor jack and a set of conventional jack stands. You might not see them unless you're looking for them (which I do). Even with a bunch of lifts - there are times when having jack stands available is necessary. The investment in them is small enough even if they don't use them every day. Tesla doesn't use conventional jack stands because of the risk they present for damaging battery packs. That logic applies to most EV's.

SeymourButts

Just curious to know if the Tesla jack pads can be used on a Porsche. They look very similar.

jpoint

The Tesla pad can be used on some Porsche cars. However, the Tesla pad is oblong to better fit the rectangular lift point on the Model S and X. The Tesla pad surface is 2.65 x 3.76 where the Porsche pad surface is 3" diameter round. If you already have the Tesla pads and want to use them on a Porsche - I'd suggest getting down and checking the Tesla pad for clearance around the plastic under panels on the various Porsche models, especially modern 911's. Also note - the low profile pad used on 911's 1987 and newer is NOT a good fit for the front lift points on the 992 GT car and the GT4 as these models have cooling fins that come quite close to the lift point surface. The Jackpoint standard pad will clear the fins, the Tesla pad WILL NOT.

By the way - in response to one of your earlier posts - the foundry that casts the stands recently got 4 new furnaces online which has upped production to about 5 times prior output. I still don't show product in stock but we're shipping allot more product than last year and working through the backlog.