JPTD consults on a $45.5m all-in-offer* for a $7m Hybrid RIA team
Practice Background
Our client is a branch manager who leads an office of more than 10 advisors with support staff. They are a hybrid RIA with 80% of its revenue being fee-based and 20% being from old insurance and annuity contracts. This was not an ensemble practice but a super OSJ meaning the advisors own their own practices. The branch manager had responsibility for compliance, operations, and recruiting. The group as a whole was growing at a rate of 10%+ CAGR over the past 3 years.
Client Objective
The client's main goals are:
- Get the support necessary to grow both organically and inorganically.
- Take some chips off the table and monetize their practice.
- All advisors except one plan on working between 10-20 years.
- They will have one advisor who plans on retiring within 4 years.
Key Data
Top line revenue - $7m
EBOC - $4.6m
EBITA - $3.1m
# of clients - 500+
3 year CAGR - 11%
Years in biz - 31
All-In Offer* Highlights
Headline price - $45.5m (6.5X top-line revenue and 14.5X EBITA)
Paid at time of closing - $27.3m (97% capital gains tax)
End of year 2 earn-out based on revenue retention - $9.1m
End of year 3 earn-out based on 10% CAGR - $9.1m
Ability to take up to 30% of upfront bonus in PE firm stock
W2 model with 35% payout and no expenses
Upon retirement, 50% of income paid for five years
*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.