What buyers actually find in mid-market manufacturing diligence (and what ownership did not see)

Buyers of mid-market manufacturing operations find five categories of issue in operational due diligence that ownership consistently does not see in advance: customer-concentration risk that exceeds the apparent revenue diversity, working-capital traps embedded in inventory and AR aging, compliance overhang from undocumented quality or regulatory gaps, key-person risk concentrated in operators or sales relationships that have not been institutionalized, and EBITDA quality issues where the reported EBITDA includes addbacks or non-recurring items the buyer will not credit. Each finding has a price effect. The cumulative effect is the difference between the multiple ownership expected and the multiple the buyer is willing to pay.