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$7m Hybrid RIA Brings In $45.5m Offer

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.

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.

Client Objective

Top line revenue - $7m

EBOC - $4.6m

EBITA - $3.1m

# of clients - 500+

3 year CAGR - 11%

Years in biz - 31

Key Data

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

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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