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European Media and Marketing Agency

CASH FLOW
$525,000

Specifications

  • Price
    $1,210,000

  • Revenue
    $2,173,000

  • Equipment
    $75,000

  • Profit Margin
    24%

  • Location
    Sofia, Bulgaria

  • Service Area
    Local and regional (90%), international reach (10%)

  • Lease
    ~5,000 sq. ft. (550 sq. m.) Beautiful office including reception, conference rooms, kitchenette, private offices, open workspaces

  • Intangible Assets
    Extremely well-regarded company, regional expertise, knowledgeable team, diverse client base, invaluable leadership

  • Employees
    63: Graphic designers, client relationships, social, media analysis, web services, admin., social media, editing, and outreach (38 FT, 25 PT)

Located in Sofia, Bulgaria, this internationally recognized media management and marketing agency earns $2MM (BGN) in gross revenue and $525,000 (BGN) in cash flow.  Working for worldwide companies, the client base is well-diversified with 70% international clients and 30% regional clients.  The highly-regarded team provides top to bottom media communications services including advising, training, and education, graphic design, as ell as crisis management.  This Firm has 63 employees (38 FT and 25 PT) making it turnkey and set up for an incoming buyer to take over. The Seller, currently operating in an oversight capacity, is also willing to remain on as CEO (if desired) or Board Chairman for 3-5 years post-sale. This would ensure a smooth transition for not only clients but staff as well.   

 

Completing over 5,000 projects in the past two decades, strategic creativity abounds amongst this team of seventy-five.  Specialists in crisis management, public affairs, and public relations work directly with clients to manage their brand through multi-faceted communication channels including social media sites, web site development, television, public appearances, media interaction, and radio. This well-trained and educated team run day-to-day operations effectively while the owner is meeting with clients both in and out of the country.  Though a new owner would not need to travel, the team frequently travels locally, regionally, and internationally. 

 

Full-equipped with beautiful furniture and fixtures, as well as cutting edge professional tools, the building is owned by the seller and is available for continued lease

Business Highlights

  • Year Established: 1995
  • Location: Sofia, Bulgaria
  • Service Area: Local and regional (30%), international work (70%)
  • Clients: Very diversified client base
  • Services: Full-service marketing, media management, crisis management, graphics
  • Building: ~5,000 sq. ft. (550 sq. m.) Beautiful office including reception, conference rooms, kitchenette, private offices, open workspaces
  • Reason for Selling: Exit Strategy Planning
  • Employees: 63: Graphic designers, client relationships,  media analysis, web services, admin., social media, editing, and outreach (38FT, 25 PT)
  • Seller Training Period: Seller will remain on as CEO or Board Chairman for 3-5 years or as negotiated 
  • Growth Opportunities: Expand virtual reality offerings
  • Current Owner’s Responsibilities: Owner/operator

Financial Highlights

  • List Price: $1,210,000 EUR
  • List Price: $1,363,000 USD
  • List Price: $2,050,000 BGN
  • Gross Sales BGN:
    • 2018: $2,173,000
  • Cash Flow USD:
    • 2018: $304,198
  • Cash Flow BGN:
    • 2018: $525,000
  • Assets Included in Purchase*
    • Equipment: $85,500 USD/$147,000 BGN Furniture, fixtures, equipment
    • Intangible Assets: Extremely well-regarded company, regional expertise, knowledgeable team, diverse client base, invaluable leadership

*amounts may vary

Cash Flow Analysis

Description of Financial StatementP&L StatementP&L StatementTax ReturnNotes
201820172016
GROSS SALES$1,258,980$1,180,171$1,122,827
Net Income Shown on Financial Statement$56,199$348,204$316,918
ADDBACKS
Depreciation$0$20,857$20,857
Interest$4,635$4,635$0
Management Fee$243,337$0$0
TOTAL ADDBACKS$247,972$25,492$20,857
Seller's Cash Flow = Total Addbacks + Net Income$304,171$373,696$337,775
Profit Margin24.16 %31.66 %30.08 %
  • 2018 profit margin: 24%

Typical Clients and Services

This dynamic creative team works with a predominantly international client base and represents their interests in the Bulgarian region. 

Client locations:

  • Local and regional (30%)
  • International (70%)

Service area:

  • Local and regional (90%)
  • International (10%)

 

Services:

  • Advising
  • Training and education
  • Graphic design
  • Social media management
  • Crisis management
  • Web site development
  • Television appearances
  • Public appearances
  • Media interaction

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

Employees

Total employees: 63 (38 are full-time, 25 are part-time)

  • Graphic designers (5)
  • Client relationships (15)
  • Media analysis (12)
  • Web services (5)
  • Administration (4)
  • Social media (5)
  • Event planning (2)
  • Editing (2)
  • Outreach and education (3)
  • Additional Support (10)

Growth Opportunities

  • Increase social media services 
  • Expand virtual reality offerings 
  • Develop proactive communication techniques 
  • Refine social media approaches as the platforms change over time 
  • Improve content development for web and print

Valuation Details

The Firm Business Brokerage 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 multiple is prescribed 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 multiple.

For this business, a 2-year average cash flow was used with a prescribed multiple is 4.02.  With this information, the computation is as follows:

EUR: $300,860           x          4.02     =          $1,209,457

 

The fair market value found above positions the business list price at $1,210,000 EUR.

Funding Example USD

Purchase Price:                          $1,363,000

15%Buyer Down Payment:          $204,450

30%Seller Financing:                   $408,900

55%Bank Loan:                             $749,650

Seller financing 6-year term at a rate of 4.50% equals a monthly loan payment of $6,491.

Bank loan 8-year term at a rate of 6% equals a monthly loan payment of $9,851.

After business expenses and loan payments, a buyer with a 15% down payment of $204,450 would retain a profit of $142,856, which results in a 70% return on investment in the first year.

A lender is required to have a minimum 1.5 coverage ratio for any business loans extended. At a proposed purchase price of $1,363,000 with the terms listed above, the coverage ratio is 1.73. 

Please note that the decision of whether to extend a loan on any sale belongs to the bank, and this document does not guarantee specific terms or verify that financing is available. 

Funding Example BGN

Purchase Price:                             $2,367,000

15% Buyer Down Payment:          $355,050

30% Seller Financing:                   $710,100

55% Bank Loan:                          $1,301,850

After business expenses and loan payments, a buyer with a 15% down payment of $355m050 would retain a profit of $247m951, which results in a 70% return on investment in the first year.

Due to variance in international banking, we are unable to offer estimations on international lending utilizing BGN.

Please note that the decision of whether to extend a loan on any sale belongs to the bank, and this document does not guarantee specific terms or verify that financing is available. 

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