Opportunities
Nationwide Multi-Year Government Contracts for Full-Service Marketing & PR
31 employees for transportation, automotive, and DOT work!
Specifications
Established 1996 and with multi-year sub-contracts ranging from $60-$420K per year for three to five years, this award winning full-service public relations and marketing firm has been serving their clients statewide, nationally and internationally for 20+ years. Average value of prime contracts is $1M for 5-6 years and majority of their clients are recurring with 10+ year average tenure. They have a total of 12 clients, with multiple being contracts with state and federal agencies. One of their main clients with 6 multi-year contracts is recognized nationwide and internationally for its leadership and innovation and in many ways is ten years ahead of other states because this company has more experience in next generation intelligent transportation systems than any other communications and training firms in the country. From their Southeast US 5,500 square feet office with $300K worth of assets that includes digital production equipment, the firm provides public relations, digital marketing & advertising, knowledge transfer, research & strategic services all under one roof. With a 25% profit margin, they primarily serve government agencies, but also have clients in construction, automotive, and emerging technologies. In addition, they have a robust marketing process that has culminated in 8000+ industry leaders and decisionmakers who receive company e-newsletters on a regular basis.
The firm’s reputation is so strong in the transportation industry it is consistently sought out as a teaming partner by an impressive list of engineering, intelligent transportation, and planning firms Like HDR, Atkins and Booz & Allen. They win large, impressive contracts competing against strong incumbents due to their proprietary processes and scalable platforms for RFP responses, as well as strong business relationships.
They have a team of 31 highly skilled fulltime employees that include a creative director who has won numerous awards for the branding, websites and marketing collateral he has developed for this company’s clients. In general, many employees have 10+ year tenure with the company and have professional backgrounds in journalism.
With the results of the presidential election, the public relations industry is convinced that an infrastructure bill is imminent and this company is positioned to ride this wave of opportunity and grow because they have been leading outreach efforts for next generation intelligent transportation systems and connected vehicles for 15 years. In addition, they have more experience in these future focused specialties than any other communications and training firm in the nation.Business Highlights
- Revenue: $3,358,404 (2019)
- Cash Flow: $990,945 (2019)
- Year Established: 1996
- Location: Florida
- Service Area: Locally, Nationally and internationally
- Number of Clients: 12 – multiple contracts with state and federal agencies
- Services: Public relations & Outreach, Digital Marketing and Advertising, Knowledge Transfer & Learning management, research & strategy and event management services
- Employees: 31 full time employees including 6 longtime independent contractors; 2 owners, CEO, CFO and VP’s for each service division
- Reason for Selling: Retirement planning
- Seller Training Period: 1-2 Years. Longer if needed
Financial Highlights
- List Price: $4,200,000
Gross Sales
- 2020: $3,237,076 (Annualized)
- 2019: $3,358,404
- 2018: $3,223,327
2019 Cash Flow: $990,945
Assets Included in Purchase : $300,000
- Equipment: IT pipeline, office and digital production equipment, phone systems
- A/R: $222,361.11
- A/P: $10,315.59
- Working Capital: $80,315.59
Cashflow Analysis
| Description of Financial Statement | P&L Statement Jan-Sept. Accrual | Tax Return Accrual Basis | Notes |
| 2020 | 2019 | ||
| GROSS SALES | $2,562,969 | $3,358,404 | |
| Annualized | $3,237,076 | ||
| Net Income Shown on Financial Statement | $651,199 | $902,410 | |
| ADDBACKS | |||
| Compensation to Owner | $74,732 | $157,116 | |
| Other Unrelated Salaries | $0 | $0 | |
| 11% Tax on total W2 Salaries | $8,221 | $17,283 | |
| Depreciation | $9,000 | $16,738 | |
| Interest | $0 | $0 | |
| Replacement | $-120,000 | $-160,000 | |
| Rent | $-6,227 | $18,108 | |
| Auto Expense | $2,880 | $3,840 | |
| Travel | $5,764 | $13,730 | |
| Insurance | $9,900 | $13,200 | |
| Meals | $8,390 | $5,040 | |
| Cell Phone | $2,610 | $3,480 | |
| Donations | $707 | $0 | |
| TOTAL ADDBACKS | $-4,023 | $88,535 | |
| Seller's Cash Flow = Total Addbacks + Net Income | $647,176 | $990,945 | |
| Annualized | |||
| Profit Margin | 25.25 % | 29.51 % |
- 2020 net income and profit margin are lower than 2019 because client activities planned for 2020 were delayed by Covid-19 and by the election.
- Government clients prefer to be low-key during an election season. Activities are expected to return to normal in mid-November/December 2020.
Valuation
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 parameters which valuate the health of the business. For this valuation, we used the 2019 cash flow average 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:
$990,945 x 4.25 = $4,211,516
The fair market value found above positions this company's list price as $4,200,000
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