Firm A is projected to have $150MM AUM by YE2017 and expects to grow at 15% annually while maintaining EBITDA margins of 30% and management fee of 75bps. Partner A (100% owner) is selling a 30% minority stake to Partner B; Partner B proposed the following terms for the transaction:
- Partner B pays $250,000 cash and $500,000 seller-note using 7-year straight line amortization with 6% interest.
Calculate the implied valuation of the company, and annual cash flows to and from each party. Assume Firm A has no D&A and no debt on their B/S.
Can someone please point me into the right direction? Thanks.
