SRG Announces the Sale of Washington-based RIA
25 June 2024 - 3:05PM
Business Wire
SRG’s 36th transaction year-to-date
Succession Resource Group (SRG) announced the sale of
Washington-based Registered Investment Advisor (RIA), Evergreen
Wealth Management Services, Inc. (EWMS) to a larger San Francisco,
California RIA with more than $500 million in assets under
management (AUM), led by a CFA and CPA. The sale represents more
than $60 million in AUM, putting the acquiring firm over $600
million in AUM.
In aggregate, this represents the 36th transaction SRG has
facilitated year-to-date with more than $6.7 billion in AUM, a
20.00% increase in deal volume over the same period in 2023. These
findings are consistent with data recently released by DeVoe &
Company; transactions involving under $1B are increasing in volume
faster than the larger “enterprise-level” firm sales.
EWMS was a fee-only RIA located in Northern Washington. The
practice was efficiently run, with 72 households and effectively no
built-in overhead a buyer would need to retain. After four decades
of operating, EWMS contracted SRG to lead the search for a
successor and handle the negotiations for the eventual sale of the
practice.
Leveraging SRG’s sell-side team, the transaction was completed
in less than ten months, closing in March of 2024 after a rigorous
nationwide search and negotiation process designed to ensure the
ultimate successor firm was an optimal fit. The practice was listed
with an aggressive initial asking price of 2.9x revenue, 9.7x
earnings, or 8.8x EBITDA and a strict definition of the ideal buyer
for EWMS’ clients. Within two months after accepting an offer and
closing the transaction, EWMS happily reported more than 90% client
transition, even with the unique circumstances requiring positive
client consent.
Key Highlights:
- SRG sourced more than 75 qualified candidates, then narrowed
the pool to nine (9) matches using its proprietary matching
algorithm that met the seller’s core criteria: fee-only, willing to
maintain accounts at Schwab, an active money manager, at least ten
years of experience, and a larger firm.
- Of the nine (9) finalists, three (3) buyers were asked to make
offers; each making offers at or above asking.
- EWMS ultimately accepted an offer from the firm that had the
best fit, resulting in 70% cash being paid following positive
consent and the balance within 12 months. The buyer required no
ongoing commitment from the seller beyond supporting the
introduction of clients – though bonuses were agreed to for
exceeding growth targets.
- The sale resulted in a multiple of 9.7x earnings, 11% higher
than the listing price, and higher than expected for a firm of this
size where the entire price was paid in the first 12 months.
Kristen Grau, CPA, CVA, CEPA, and Director of Sell-Side
Services, stated, “EWMS was committed to selecting a firm that knew
the markets and would actively manage client money while providing
their clients with the same high-touch, customized solutions –
which was surprisingly challenging to find since few buyers
actively manage client assets. By leveraging our team and process,
and maintaining a selfless focus on client fit, EWMS and the buyer
were able to create a win for all parties involved, as evidenced by
the successful retention of clients post-sale.”
About Succession Resource Group Succession Resource Group
(SRG) is an award-winning consulting firm dedicated to supporting
independent financial professionals across the country. We leverage
decades of experience to provide a comprehensive suite of services,
including valuation, M&A, succession planning, and practice
management solutions. Our mission is to empower financial
professionals at every stage of their business journey, helping
them navigate complexities, maximize value, and achieve their
long-term goals. For more information, visit
SuccessionResource.com.
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Tina Powell tina@growintentionally.com 201-212-0072