Architecture, Interior Design & Landscape Architecture with 75% Recurring Clients
Multiple locations and 80 professionals – owner will roll 20% equity!
This firm has multiple locations and 80 professionals on staff! 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. Specializing in architecture (75%), interior design (20%), and landscape architecture (5%), 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% recurring clients.
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.
- Year Established: 1973
- Location: Multi-Location in Pennsylvania
- Service Area: Pennsylvania, Delaware, New Jersey & Maryland
- Services: Architecture, Interior Design & Landscape Architecture
- Clients: Developers, contractors, corporate end-users, public & private institutions
- 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, strategic exit
- Personnel: 80 employees including owners, who will stay on under new ownership
- Seller Training Period: All owners will stay 2-8 years
- Growth Opportunities: Expanding market share in healthcare and senior living, opening new location in mid or western PA
- List Price: $12,250,000
- Gross Sales:
- 2020: $17,407,137 Annualized
- 2019: $16,451,782
- 2018: $17,745,051
- 2017: $13,047,518
- Cash Flow:
- 2020: $2,579,405 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||Tax Return||Tax Return||Notes|
|Net Income Shown on Financial Statement||$2,871,856||$3,281,356||$1,359,013|
|Insurance Premiums for Owners: Health, Life, Auto||$0||$0||$0|
|Seller's Cash Flow = Total Addbacks + Net Income||$2,935,924||$3,328,272||$1,392,709|
|Profit Margin||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 4.15. With this information, the computation is as follows:
$2,947,867 x 4.15 = $12,233,648
The fair market value found above positions the business list price at $12,250,000.
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