JPTD consults on a $6mm all-in-offer* for a $1.0mm PURE RIA
Practice Background
Our client is a pure RIA specializing in the money management for contingency fees attorneys. They are a pure RIA with 100% of its revenue being fee-based. This was not an ensemble practice but a division where there was one lead advisor and one staff person. The company had built these assets over 7 years and wanted to stay in the trust and custodian services business versus asset management.
Client Objective
The client's goals are:
- Partner with a world-class firm that puts advisors and clients first
- Find a company that could assume the asset management of the RIA.
- Create an ongoing solicitor's agreement for new business in the future.
- Have a smooth an easy transition of client accounts.
Key Data
Top line revenue - $1.0m
EBITA - $840,000
AUM - $110m
# of clients - 125
Average Client Age - 50
Product Mix: 100% fee-based
All-In Offer* Highlights
- 100% acquisition
- Sell and create ongoing solicitors agreement
- $3mm cash upon signing/1mm company stock upon signing
- $1mm for 95% revenue retention end of year 1
- $1mm for 95% revenue retention end of year 2
- Ongoing solicitor's agreement for 25% on new business for 5 years
- Potential buyback of revenue stream with guaranteed multiple after five years
- Advisor is not staying in the practice, so no ongoing compensation
- Deal could be worth more than 6x depending on the back end of solicitor's agreement
*An All In Offer includes any money paid upfront, signing bonus, salary and potential earn-outs based on growth. It does not include retirement or overrides on production. Assumes you hit all required transition, retention and growth expectations.