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Condo & Industrial Focused Architecture Firm in Toronto

Amazing comeback after COVID – selling at only a 3 multiple!

CASH FLOW
$440,883

Specifications

  • Price
    $1,325,000

  • Revenue
    $854,852

  • Cash Flow
    $440,883

  • Location
    Toronto

  • Service Area
    Greater Toronto Area

  • Employees
    7; 1 owner/architect, 3 architects and 3 architectural technologists

  • Profit Margin
    30%

  • Reason for Sale
    Owner wants to build up the business with a partner or owner

  • Intangible Assets
    Loyal client base, well-established name, word-of-mouth referrals

This architecture firm in Toronto has a focus largely on condominiums and the industrial sector. They have seen a tremendous comeback after COVID in 2021 and are still selling at just a 3x multiple! A solid team is already in place; the staff of 7 works out of a 2,500 square foot office and includes the owner/architect, 1 Senior Architect, 2 Mid-Level Architects, 2 Senior Technologists, and 1 Mid-Level Technologist. The team is highly educated and experienced at their craft, allowing for solid word-of-mouth referrals and a loyal, recurring client base of developers, engineers, and general contractors. This firm has been serving the Greater Toronto Area since 2000; their portfolio primarily consists of condominiums (80%), and includes commercial, industrial, institutional, and interiors. Their spectacular designs are well-known throughout the Toronto area.

 

Priced at $1,325,000, this is an incredible opportunity for a new owner to step in and focus on recruiting and business development, while partnering with the current owner to expand the business. Most clients are obtained through word-of-mouth referrals and are often repeat clients, proving this firm’s commitment to listening and working collaboratively with their clients throughout the projects. This partnership will result in more work being sought after and more projects brought into the fold, giving great potential for increased revenue and business expansion.

Business Highlights

  • Year Established: 2000
  • Location:  Toronto
  • Service Area:  Greater Toronto Area
  • Services: Full-service architecture firm, primarily specializing in condominiums (80%); industrial sector, retail, mid to high-rise residential, interiors
  • Clients: Developers, Engineers, General Contractors
  • Lease: 2,500 sq. ft. office
  • Reason for Selling: Owner wants to build up the business (will roll 15% equity if buyer allows)
  • Personnel: 7; 1 owner/architect + 3 Architects and 3 Architectural Technologists
  • Seller Training Period: 3-5 years
  • Growth Opportunities: Expand the business by working as a partnership and increasing number of projects
  • Current Owner’s Responsibilities: Design & Execute projects, Business Development

Financial Highlights

  • List Price: $1,325,000 CAD

  • 2021 Annualized Cash Flow: $440,883

 

Cash Flow Analysis

Description of Financial StatementP&L Statement
Jan-Nov 2021
P&L StatementP&L StatementP&L StatementNotes
2021202020192018
GROSS SALES$783,614$521,340$1,135,674$1,013,304
Annualized$854,852
Net Income Shown on Financial Statement$188,747$29,043$341,944$244,989
ADDBACKS
Compensation to Owner$146,667$95,000$50,000$27,000Would like to stay on board
11% Tax on total W2 Salaries$16,133$10,450$5,500$2,970
Depreciation$0$0$23,620$17,208
Life Insurance$4,950$5,400$5,400$5,400$450/month for personal life insurance
Contributions/Donations$0$0$0$0Non-onward going expense
Interest$118$58$0$0
Salary$-91,667$-100,000$-100,000$-100,000To keep owner in place
Meals & Entertainment$5,276$6,155$0$0
Computer Expenses$8,000$0$0$0Purchase new computers for staff - non onward-going
Dues/Subscriptions$1,600$0$0$0Upgraded software packages - non onward-going
Auto Expenses$14,098$17,398$19,815$23,622
TOTAL ADDBACKS$105,175$34,461$4,335$-23,800
Seller's Cash Flow = Total Addbacks + Net Income$293,922$63,504$346,279$221,189
Annualized$320,642
Profit Margin37.51 %12.18 %30.49 %21.83 %

2020 was an anomaly year due to projects being put on hold. Around March 2020, two of their scheduled projects for the year were cancelled due to the unpredictable financial forecast. This forced them to downsize for a short period.

Clients

  • Developers
  • Engineers
  • General Contractors

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

Services

  • Residential (primarily condominiums)
  • Commercial
  • Industrial
  • Institutional
  • Interiors

Personnel

  • 1 owner
  • 2 architects
  • 2 architectural draftsmen
  • 1 intern

Growth Opportunities

  • Expand the business by working as a partnership and increasing the number of projects

Valuation Details


Funding Example

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

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f 402.939.0857

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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.