Toronto Architecture Firm - Specialty in Mid to High-Rise Condominiums
Owner wants to stay on board and help grow the business!
The owner of this Toronto architecture firm wants to stay on board as a partner and help expand the business! With over $1.1M in projected revenue for 2021 and 2022 looking even more profitable, this firm has a 21% average profit margin. Selling at a 3.15 multiple and with a 20% seller earnout, this is a tremendous acquisition opportunity for the right buyer. 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 $1,090,000, a down payment of $163,500 returns $185,780 in the first year after debt payments – a 114% return on investment. 2021 and 2022 are looking to be extremely profitable; several projects are already in different stages of development. 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. 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.
- 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
- List Price: $1,090,000 CAD
- Assets Included in Purchase*
- Equipment: Computers, printers, photocopiers
- A/R: $36,979
- Intangible Assets: Loyal client base, well-established name, word-of-mouth referrals
Cash Flow Analysis
|Description of Financial Statement||P&L Statement|
|P&L Statement||P&L Statement||P&L Statement||Notes|
|Net Income Shown on Financial Statement||$43,601||$29,043||$341,944||$244,989|
|Compensation to Owner||$50,000||$95,000||$50,000||$27,000||Would like to stay on board|
|11% Tax on total W2 Salaries||$5,500||$10,450||$5,500||$2,970|
|Life Insurance||$2,700||$5,400||$5,400||$5,400||$450/month for personal life insurance|
|Contributions/Donations||$0||$0||$0||$0||Non-onward going expense|
|Salary||$-50,000||$-100,000||$-100,000||$-100,000||To keep owner in place|
|Meals & Entertainment||$2,755||$6,155||$0||$0|
|Computer Expenses||$8,000||$0||$0||$0||Purchase new computers for staff - non onward-going|
|Dues/Subscriptions||$1,600||$0||$0||$0||Upgraded software packages - non onward-going|
|Seller's Cash Flow = Total Addbacks + Net Income||$72,839||$63,504||$346,279||$221,189|
|Profit Margin||20.25 %||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.
Invoicing for July-December 2021: $757,125
Total Projected 2021 Revenue: $1,116,775
Average Profit Margin: 21%
Projected 2021 Cash Flow (based on projected revenue and average profit margin): $234,523
- General Contractors
Specific information regarding clients is available upon the receipt of a signed Non-Disclosure Agreement.
- Residential (primarily condominiums)
- 1 owner
- 2 architects
- 2 architectural draftsmen
- 1 intern
- Expand the business by working as a partnership and increasing the number of projects
|Document Title / Description|
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