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$3m Hybrid RIA Brings In $17m All In Offer

Practice Background

Our client is an ensemble practice of 3 advisors with a seasoned support staff team. They are a hybrid RIA with 90% of its revenue being fee-based and 10% being from annuity, alternatives, and insurance. This practice was located in a small rural city and has been in its location for 20 years. The lead advisor had responsibility for compliance, operations, and recruiting. The group as a whole was growing at a rate of 12% CAGR over the past 3 years for top-line revenue.

The client's main goals are:

  • To derisk the firm and monetize the ensemble practice.

  • To continue to work in the practice for another five to ten years.

  • To find a potential suitor who was strong in lead generation, marketing, and technology.

  • To make sure their clients and operations team were taken care of post-transaction.

  • Minimize disruption in any move.

Client Objective

Top line revenue - $3m
EBOC - $1.8m
EBITDA - $1.475m
# of households - 800
AUM - $400,000,000
3-year CAGR - 12%
Years in biz - 20

Key Data

Headline Price (consideration) - $17M (Approximately 6x gross revenue and 12x EBITDA)

Paid at Close - 60% of headline price, 93% capital gains

End of year 1 earn-out based on revenue retention - 10%

End of year 2 earn-out based on revenue retention - 10%

End of year 2 growth bonus based up revenue CAGR - 20%

Ability to take up to 40% of upfront bonus in PE firm stock. PE Stock pays dividends monthly

W-2 model with 37% payout and no expenses on new business

All-In Offer* Highlights

*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.

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