Exciting News—LOI Signed to Acquire Project Luxury!

Greetings everyone,

I’m thrilled to share some exciting news—after 14+ months of searching, I’ve signed a Letter of Intent to acquire Project Luxury, an award-winning marketing agency that helps luxury real estate developers and high-end lifestyle brands sell their properties and products. Here’s an overview of why this acquisition is a great fit and what the future holds.

Why Project Luxury Stood Out

1) Nearly 40 Years of Market Leadership

Project Luxury has a long-standing history of excellence, having served high-profile clients for nearly 4 decades. This track record not only speaks to the agency's expertise, but also highlights its durability across different business and economic cycles.

2) Strong Team and Top-Notch Seller

One of the major appeals of Project Luxury is its experienced and tenured management team. The General Manager and key leaders have been with the company for over two decades. Since the team handles many of the day-to-day operations for the Seller, that will allow me to focus on strategic growth opportunities.

Most importantly, I have built a deep trust with the Seller, who stands out for his integrity and commitment to his people. Over our six-month relationship, I’ve become more and more confident that we share many of the same values and that his guidance will be invaluable as I step into his role post-closing.

3) Flexible, Diversified Revenue Streams with High Margins

Project Luxury’s revenue model is well-diversified, with income coming from retainers (which provide stability), media services, and high-margin production work. The agency normally maintains EBITDA margins above 20%, supported by a mix of recurring revenue and profitable project work. With primarily variable costs, Project Luxury can scale up or down as needed, allowing it to adapt to changes in the economy without killing profitability.

4) Impressive Client Portfolio with Manageable Concentration Risk

Project Luxury serves a range of respected clients, from luxury real estate developers to high-end lifestyle brands, managing 25+ active projects at any given time. While there is some client concentration, it is diversified enough to still be attractive – and on a “project” basis, the work is even more diversified.

5) Significant Upside with Multiple Growth Opportunities

There are several avenues for growing Project Luxury:

• Geographic Expansion: The agency has historically relied on client referrals and word-of-mouth. With strategic outreach in high-growth luxury markets beyond the core geographies the agency serves, there’s potential to add new clients and scale significantly.

• Service Diversification: I am exploring ways to expand service offerings for existing clients, which could bring in additional revenue streams and add value for current clients.

• Targeted M&A: This industry is highly fragmented, with many niche players. There will likely be strategic M&A opportunities with complementary agencies that enable Project Luxury to add to its already impressive client base and/or enhance its service offerings.

• Expansion into Adjacent Clients: Building on Project Luxury’s brand strength, the agency could serve different types of clients that are adjacent to those clients it serves today.

My Fit and Vision for Project Luxury

B2B sales is my superpower, and Project Luxury’s B2B client base and established processes align perfectly with my strengths. This is an exciting opportunity to leverage my expertise to grow and scale the business.

In my last role as SVP of Sales, I built our B2B sales process, led go-to-market strategy, and scaled the company from $1M to $11M in sales (though I credit my incredible team, who made that possible). I’m confident these skills will translate well to Project Luxury, which, up to now, has relied entirely on the quality of its work for repeat business and referrals without a formal business development function.

What’s Next?

With the LOI signed, we’re now moving into the due diligence phase. This process includes a deep dive into financials, client contracts, and operations. My goal is to finalize diligence and sign the purchase agreement before year-end, although this deal has a very unique structure.

Creative Deal Structuring

Rather than a traditional “sign and close” approach, I’ll join the Seller’s executive team for a 6-month period before finalizing the transaction.

This creative structure is a true win-win-win (what my good friend Andrew Smallwood would call a “triple win”).

• The Seller retains business cash flow during what would typically be a post-closing transition, effectively raising the purchase price.

• I gain invaluable time and experience working alongside the Seller and the team to ensure I fully understand the business.

• Clients continue to receive Project Luxury’s high standard of service and employees get a smoother transition to new management.

This structure de-risks the transaction and makes me even more excited about the prospects of this business.

Reflections on the Search Process

Moving forward with this acquisition marks a major milestone in my journey, and it’s one that’s been both challenging and rewarding. I’ve evaluated nearly 200 acquisition candidates up to this point, but have stayed patient and held out for the right opportunity. I feel confident this is the one.

Thank you to everyone who has followed and supported my journey. If you have experience with advertising agencies or large real estate developments, I’d love to hear from you. And stay tuned for future updates as we move closer to closing!

Cheers,

-Drew