Opportunities
29% Profit Margin for Media & Marketing Agency in Bulgaria
90% of clients are long-term with 10+ years tenure!
Specifications
This Firm has 64 employees (38 FT and 26 PT) making it turnkey and set up for an incoming buyer to take over. Silicon Valley of Eastern Europe – Sofia, Bulgaria. The owner is willing to remain as the general manager for 3+ years! They boast a very diverse client base, with 30% being local and regional, and 70% being international clients.
This top internationally recognized media management and marketing agency earns $2MM (BGN) in gross revenue and $784,000 (BGN) in cash flow. The highly regarded team provides top to bottom media communications services including advising, training and education, graphic design, as well as crisis management. The Seller, currently operating in an oversight capacity, is also willing to remain on as GM (if desired) for 3 years post-sale. This would ensure a smooth transition for not only clients but staff as well.
Completing over 5,000 projects in the past two decades, strategic creativity abounds amongst this team of seventy-four. Specialists in crisis management, public affairs, and public relations work directly with clients to manage their brand through multi-faceted communication channels including social media sites, web site development, television, public appearances, media interaction, and radio. This well-trained and educated team run day-to-day operations effectively while the owner is meeting with clients both in and out of the country and no billable hours. Though a new owner would not need to travel, the team frequently travels locally, regionally, and internationally.
Fully equipped with beautiful furniture and fixtures, as well as cutting edge professional tools, the building is owned by the seller and is available for continued lease.
Business Highlights
- Year Established: 1995
- Location: Sofia, Bulgaria
- Clients: Very diversified client base
- Services: Full-service marketing, media management, crisis management, graphics
- Building: ~5,000 sq. ft. (550 sq. m.) Beautiful office including reception, conference rooms, kitchenette, private offices, open workspaces
- Reason for Selling: Retirement
- Employees: 64: Graphic designers, client relationships, social, media analysis, web services, admin., social media, editing, and outreach (38FT, 26 PT)
- Seller Training Period: Seller will remain on as GM for 3 years, or as negotiated
- Growth Opportunities: Expand virtual reality offerings and have a satellite office in America
- Current Owner’s Responsibilities: Oversight, no billable hours
Financial Highlights
- List Price: $1,375,000 USD
- Gross Sales BGN:
- 2019: $2,662,000
- Cash Flow USD:
- 2019: $485,815
- Cash Flow BGN:
- 2019: $784,000
- Assets Included in Purchase*
- Equipment: $85,500 USD/$147,000 BGN - Furniture, fixtures, equipment
- Intangible Assets: Extremely well-regarded company, regional expertise, knowledgeable team, diverse client base, invaluable leadership
*amounts may vary
Cash Flow Analysis
| Description of Financial Statement | P&L Statement | P&L Statement | P&L Statement | P&L Statement | P&L Statement | Notes |
| 2020 | 2019 | 2018 | 2017 | 2016 | ||
| GROSS SALES | $1,815,834 | $2,662,000 | $2,315,000 | $2,160,000 | $2,160,000 | |
| Net Income Shown on Financial Statement | $224,000 | $745,000 | $602,000 | $606,000 | $547,000 | |
| ADDBACKS | ||||||
| Depreciation | $39,000 | $39,000 | $36,000 | $39,000 | $36,000 | |
| Interest | $0 | $0 | $8,000 | $8,000 | $0 | |
| Tax | $8,000 | $0 | $9,000 | $0 | $0 | |
| Compensation to Owner | $168,000 | $0 | $0 | $0 | $0 | |
| 11% Interest on W2 | $18,480 | $0 | $0 | $0 | $0 | |
| TOTAL ADDBACKS | $233,480 | $39,000 | $53,000 | $47,000 | $36,000 | |
| Seller's Cash Flow = Total Addbacks + Net Income | $457,480 | $784,000 | $655,000 | $653,000 | $583,000 | |
| Profit Margin | 25.19 % | 29.45 % | 28.29 % | 30.23 % | 26.99 % |
- 2019 profit margin: 29%
Typical Clients and Services
This dynamic creative team works with a predominantly international client base and represents their interests in the Bulgarian region.
Client locations:
- Local and regional (30%)
- International (70%)
Service area:
- Local and regional (90%)
- International (10%)
Services:
- Advising
- Training and education
- Graphic design
- Social media management
- Crisis management
- Web site development
- Television appearances
- Public appearances
- Media interaction
Specific information regarding clients is available upon the receipt of a signed Non-Disclosure Agreement.
Employees
Total employees: 64 (38 are full-time, 26 are part-time)
- Graphic designers (5)
- Client relationships (15)
- Media analysis (12)
- Web services (5)
- Administration (4)
- Social media (5)
- Event planning (2)
- Editing (2)
- Outreach and education (3)
- Additional Support (10)
Growth Opportunities
- Increase social media services
- Expand virtual reality offerings
- Develop proactive communication techniques
- Refine social media approaches as the platforms change over time
- Improve content development for web and print
Valuation Details
The Firm Business Brokerage used a cash flow valuation methodology to determine the purchase price of the business.
The formula used is as follows:
Cash Flow x Prescribed Multiple = Fair Market Value
Cash flow is the sum of business net income plus any owner perks and any non-onward going expenses.
A multiple is prescribed by a 20 question, 100-point parameter ranking system that is used to analyze the current business health. Each question is based on a scale from 1 to 5: 1 being low, 2 below average, 3 average, 4 above average, 5 high. The average of the responses sum is the business’ prescribed multiple.
For this business, a 2019 cash flow was used with a prescribed multiple is 3.35. With this information, the computation is as follows:
USD: $485,815 x 3.35 = $1,627,480
The fair market value found above positions the business list price at $1,375,000 USD.
Funding Example USD
Purchase Price: $1,375,000 USD
| 20% Buyer Down Payment | $275,000 |
| 20% Seller Financing or Equity Roll | $275,000 |
| 60% Bank Loan | $825,000 |
After business expenses and loan payments, a buyer with a 20% down payment of $275,000 would retain a profit of $323,520.
Please note that the decision of whether to extend a loan on any sale belongs to the bank, and this document does not guarantee specific terms or verify that financing is available.
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