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Executive Recruitment for Pharmaceuticals, Biotech, & Diagnostic Industries

With a 5-year average profit margin of 50%!

CASH FLOW
$523,215

Specifications

  • Price
    $2,190,000

  • Revenue
    $760,028

  • Cash Flow
    $523,215

  • Down Payment
    12%

  • Multiplier
    4.20

  • Reason for Sale
    Retirement Planning

  • Profit Margin
    53%

  • Employees
    4: 1 Owner, 2 FT Recruiters, 1 PT Office Admin

  • Location
    Bucks County, Pennsylvania

With a 5-year average profit margin of 50%, this executive recruitment firm has extremely low overhead; all employees work remotely! Established in 1996, this team of four has 70 years of combined industry experience; it includes the owner, who handles recruitment, business development, and financial oversight, along with 2 full-time recruiters and one part-time office administrator. Located in the greater Philadelphia region and well-established for nearly 25 years, this business has a solid reputation with nationwide clients.  They specialize in finding the perfect fit for life sciences industry clients, ranging from translational to commercial, and start-up to Fortune 500. Executive and professional level placements include Chief Officers, Vice Presidents, Executive Directors, Senior Managers, Senior Directors, Account Managers, and much more. This company also offers career coaching services for individuals looking to present themselves as the top candidate to employers – coaching includes resume presentation, mock interviews, and compensation negotiations.

 

Using top-notch PCRecruiter Software, the company has the capability of pulling various reports, posting jobs, receiving candidate inquiries, and accessing their comprehensive database, all 100% remotely. This recruitment team consistently exceeds their clients’ expectations; 70% of their clients have been with them for over 14 years.

 

Priced at $2,190,000, this company is in a prime position for growth. With proactive business development and an increase in recruiters, the business could boost their revenue tenfold. The need for recruitment of scientists has surged in recent months; pursuing this avenue would also lead to substantial growth.

Business Highlights

  • Year Established: 1996
  • Location:  Bucks County, Pennsylvania
  • Service Area: Nationwide
  • Services: Executive and professional recruitment for life sciences industry, career coaching services
  • Clients: Biotech, pharmaceutical, diagnostics, device, CDMO
  • Average Sale Size: $45,000
  • Reason for Selling: Retirement planning
  • Personnel: 4: 1 Owner, 2 FT Recruiters, 1 PT Office Admin
  • Seller Training Period: 1-2 years
  • Growth Opportunities: Hire more recruiters, proactive business development
  • Current Owner’s Responsibilities: Recruiting, business development, financial oversight
  • Software: PCRecruiter
  • Low Overhead: No office space; all employees work remotely
  • Intangible Assets: Solid reputation, 70 years of combined industry experience, established niche in life sciences

Financial Highlights

  • List Price: $2,190,000

 

  • 5-Year Average Cash Flow: $523,215
  • 5-Year Average Profit Margin: 50%

Cash Flow Analysis

Description of Financial StatementP&L Statement
Jan-Dec 2020
Tax Return
Cash
Tax Return
Cash
Tax Return
Cash
Tax Return
Cash
Notes
20202019201820172016
GROSS SALES$760,028$963,203$993,597$1,330,550$1,174,222
Net Income Shown on Financial Statement$187,158$217,350$112,867$352,160$242,342
ADDBACKS
Compensation to Owner$193,000$280,000$275,000$270,000$265,000
Other unrelated Salaries$24,100$25,000$25,000$25,000$25,0002 daughters - no need to replace
11% Tax on total W2 Salaries$23,881$33,550$33,000$32,450$31,900
Depreciation$0$3,650$3,650$5,425$6,600
Interest$48$896$42$1,127$366
Auto Expense$1,206$1,117$6,255$3,102$2,694100% personal
Auto Insurance$5,400$5,400$5,400$5,400$5,400$450/month
Cleaning Service$2,400$2,400$2,400$2,400$2,40050% personal - $200/month
Cell Phone$3,108$3,108$3,108$3,108$3,108$259/month
Home Phone$2,940$2,940$2,940$2,940$2,940$245/month
Travel$95$13,401$21,948$15,362$16,167100% personal
Meals & Entertainment$3,383$3,842$5,316$5,043$5,259
Contributions/Donations$655$0$0$0$0
Replacement Cost$-75,000$-75,000$-75,000$-75,000$-75,000
Rent$11,580$23,760$23,760$23,375$23,100Business can be run remotely
Zoom Expense$15,000$0$0$0$0One-time cost to purchase Zoom info
Computer Consultant Fee$855$0$0$0$0One-time cost to switch to remote system
TOTAL ADDBACKS$212,651$324,064$332,819$319,732$314,934
Seller's Cash Flow = Total Addbacks + Net Income$399,809$541,414$445,686$671,892$557,276
Profit Margin52.60 %56.21 %44.86 %50.50 %47.46 %
  • Profit Margin: 53%

Clients

  • Biotech
  • Pharmaceutical
  • Diagnostics

Specific information regarding clients is available upon the receipt of a signed Non-Disclosure Agreement.

Services

  • Executive & Professional Recruitment
  • Career Coaching

Personnel

  • 1 Owner: Recruiting, executive searches, business development, financial oversight
  • 2 FT Recruiters
    • 1 FT recruiter has been with the company for over 18 years
  • 1 PT Office Manager
    • Has been with the company for over 8 years
    • Will also assist with sourcing
  • All employees are working remote and there does not need to be an office space

Growth Opportunities

  • Hire more recruiters
  • Proactive business development
  • Pursue more recruitment of scientists

Funding Example

The Firm Advisors used a cash flow valuation methodology to determine the purchase price of the business.

Cash flow is the sum of business net income plus any owner perks and any non-onward expenses. Then we prescribe a multiple based on 20 parameter which valuate the health of the business. For this valuation, we used the 5-year average cash flow value making the business price much more favorable to the buyer.

The formula used is as follows:

Cash Flow        x  Prescribed Multiple       =   Fair Market Value

 

With this information, the computation is as follows:

 

$523,215            x                4.2                 =         $2,197,503

Funding Example

Purchase Price:

$2,190,000

$
%
OR
$
%
OR
$
Years
%

Bank Loan Needed: $

Years
%
$
$
$
$
$

Funding Details

Business:

Offer Price: $

% Buyer Cash Down at Closing: $

% Seller Carry Back via Promissory Note: $

year term at a rate of %

% of Purchase Price secured by Buyer and Seller

Total Bank Loan Need: $

% of Purchase Price

Desired Loan Type:

Desired Bank Terms: year term at a rate of %

Total Business Assets, Inventory, and A/R: $

Total Undercollateralized Loan: $

Loan Payments

Monthly Payment to Bank: $
Yearly Payment to Bank: $
Monthly Payment to Seller: $
Yearly Payment to Seller: $
Total Monthly Debt Service: $
Total Yearly Debt Service: $

Conclusions

Fixed Charge Coverage Ratio

The bank will require a minimum ratio of 1.5 to be lendable.

Cash Flow:
5-year average cash flow
$
Annual Debt Service: $
RATIO:

Buyer's Net Operating Income (NOI)

The amount of money the Buyer will retain as profit.

Cash Flow:
5-year average cash flow
$
Annual Debt Service: -$
NOI:

Buyer's Return on Investment (ROI)

The rate of return on the Buyer's down payment.

Down Payment: $
NOI:
ROI: %

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210 N 78th St. 2nd Floor
Omaha, NE 68114

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The Firm is not a real estate brokerage and therefore the staff will not handle any aspect of the lease, sale or purchase of real estate.