Architecture Firm w/ Multiple Locations & 80 Professionals
Architecture, Interior Design & Landscape Architecture with 75% recurring clients!
This firm has multiple locations with over 80 expert employees! Specializing in architecture, interior design, and landscape architecture, their highly skilled team includes a full-time business director, full-time marketing director, and a full-time public relations and social media associate. Their loyal client base is comprised of developers, contractors, and corporate end-users, as well as public and private institutions.
Serving regionally in Pennsylvania, Delaware, New Jersey, and Maryland, the team secures around 200 projects per year, with 75-80% reoccurring clients. Their services include architecture (75%), interior design (15%), and landscape architecture (5). The firm is known for providing top-notch architecture and design services in the area for 47 years.
There is immense growth potential for this company. A new owner could expand market share in healthcare and senior living. Opening an office in Pittsburgh or otherwise expanding the market into middle or western Pennsylvania is a growth opportunity as well.
Established In 1973, their gross sales have been increasing year over year with a profit margin of 18%. The owners are looking for an industry consolidation and are willing to roll equity up to 20% as well as stay on 2-8 years.
- Year Established: 1973
- Location: Multi-Location in Pennyslvania
- Service Area: Pennsylvania, Delaware, New Jersey & Maryland
- Clients: Developers, contractors, corporate end-users, public & private institutions
- Services: Architecture, Interior Design & Landscape Architecture
- Building: Site 1: 10,671 sq. ft.; Site 2: 5,842 sq. ft.; Site 3: 4,682 sq ft. (currently expanding)
- Reason for Selling: Industry Consolidation
- Personnel: 80 Employees including owners, who will stay on under new ownership
- Seller Training Period: 2+ years
- Growth Opportunities: Expanding market share in healthcare and senior living; Opening new location in mid- or western PA.
- Current Owner’s Responsibilities: Three owners serve as president, VP of marketing, and VP of operations; All owners also spend 40% of their time on billable work as architects or landscape architects
- List Price: $11,500,000
- Gross Sales:
- 2020: $18,945,163 Annualized
- 2019: $16,451,782
- 2018: $17,745,051
- 2017: $13,047,518
- Cash Flow:
- 2020: $3,487,240 Annualized
- 2019: $2,935,924
- 2018: $3,328,272
- 2017: $1,392,709
- Assets Included in Purchase*
- A/R: $4,431,384
Cash Flow Analysis
|Description of Financial Statement||P&L Statement|
June 19' - May 20'
|P&L Statement||Tax Return||Tax Return||Notes|
|Net Income Shown on Financial Statement||$2,721,406||$1,410,446||$2,871,856||$3,281,356||$1,359,013|
|Insurance Premiums for Owners: Health, Life, Auto||$54,683||$34,599||$0||$0||$0|
|Seller's Cash Flow = Total Addbacks + Net Income||$2,836,798||$1,453,017||$2,935,924||$3,328,272||$1,392,709|
|Profit Margin||15.50 %||18.41 %||17.85 %||18.76 %||10.67 %|
- Corporate end-users
- Public & Private Institutions
Specific information regarding clients is available upon the receipt of a signed Non-Disclosure Agreement.
- Interior Design
- Landscape Architecture
- 80 employees (including 7 owners)
- 3 owners serve as President, VP of Marketing, and VP of Operations
- Expand market share in healthcare and senior living
- Open new location in middle or western Pennsylvania
The Firm 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 prescribed multiple is determined 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 multiplier.
For this business, a 3 year average cash flow was used with a prescribed multiple of 3.5. With this information, the computation is as follows:
$3,250,479 x 3.5 = $11,376,677
The fair market value found above positions the business list price at $11,500,000.
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