$4m Hybrid RIA Brings In $48m Offer
Practice Background
Our client is a hybrid practice with 3 second-generation advisors. The bulk of their business revenue derives from wealth management. The firm was established in 1994 and has had a growth rate of approximately 15% a year over the past 5 years. The client is a referral-based practice with the primary source of new business being client engagement events.
Client Objective
The client's goals are:
Partner with a firm that can provide support for continued growth
Have the opportunity for the Second Generation to excel and reap the benefits of continued growth
Join an organization that recognizes and agrees with the high ethical standards that have been established within the practice
Provide support for a reasonable transition for clients
Key Data
Top line revenue - $4.1m
EBITA - $1.75m
AUM - $450m
# of clients - 400
5-year CAGR - 15%
Years in biz - 28
All-In Offer* Highlights
10-Year Total Value Forecast and Highlights
Up Front Consideration
$17.5m
Ongoing Compensation **
Comp On Existing Business $12.8m
Comp On Future Business $10.2m
Long Term Considerations
5 Year Growth Accelerator $755k
LTGI $5.7m
Owner's Equity Participation ***
$2m+
Total Value Created
$48.8m
** Compensation amount reflects total compensation paid to advisors and is not necessarily all paid to seller or head of office.
*** Based on firm's stated goal $10bn in 10 year and estimated valuation at that point in time.
*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.