ROLE/FIRM: National Director – Client Development, Corporate Valuation Advisors, Inc.
Every month, we will feature an active member of the ACG New York community in a brief interview. Reflecting industry insight and personal perspective, this feature will introduce industry leaders and offer advice on the tools you need to succeed in the ever-changing middle market.
1. Quick basics– role/firm/focus/how long have you been an ACG member?
National Director – Client Development, Corporate Valuation Advisors, Inc. Responsible for leading and expanding the Valuation Services Practice in New York, the Northeast Corridor and the Midwest. ACG Member since 2005.
2. What do you think are the biggest obstacles in the middle market today?
In my opinion, ascertaining the appropriate price for a business enterprise is certainly a huge challenge. Since Spring 2013, we have seen multiples paid in purchasing business entities steadily increase. Currently those multiples are at an all-time high. To that extent, it is increasingly more difficult to find a target that is affordable, not to mention the fact that a consistent disciplined financial plan needs to be implemented by management to increase the profitability of the acquired company in developing an exit strategy. This goal is further complicated given the fact that many financial soothsayers indicate that we may be at the top of the curve in the economic scheme of things, which will likely impact business growth in a negative context. One must also consider and acknowledge that there are many competitors vying for the same slice of the pie, adding fuel to the fire within an often confusing and expensive landscape by which to execute meaningful purchases. Additionally, we’ve also noted that our larger public/private company clients in the corporate space are hesitant on making acquisitions given the high multiples expected by sellers.
3. How has ACG helped you in your career?
I find the ACG New York Chapter extremely rewarding and professional in every way. During the first year or two of my membership, I found it a bit challenging to walk into a room of financial and other talented professionals and casually mix into to the various conversations taking place. Before long, it became easy and fun. I was also fortunate to become involved with several Chapter Committees and eventually serve as a Chair. The ACG New York connections I’ve made over the years are invaluable. I’ve bonded with many of my peers in a way that is almost fraternal. I’ve received many lucrative referrals from those in the private equity, investment banking, legal, accounting and wealth advisory space and happily refer other Chapter members when the opportunity presents itself. Involvement is key…simply put, you reap from the Chapter precisely what you invest into it.
4. Can you tell us about your greatest success story/ proudest achievement?
One of the most significant business opportunities as a member of the Chapter occurred when I was introduced to the director of the private equity practice for a big-four accounting firm. We hit it off well and I was invited to many of the events he hosted over the next few years. At one of these networking events I met the Chief Financial Officer of a public company based in Manhattan. After some conversation regarding the outcome of a football game and what we each do for a living, the conversation turned into an opportunity. The CFO described that he was unhappy with his current valuation firm and was open to entertaining a proposal from CVA. The scope of the project included providing a Fairness Opinion and performing a full purchase price allocation in connection with the acquisition of a global manufacturing business with domestic & international subsidiary locations in various countries. Fortunately, we won the engagement, created a long-term relationship with our client and have worked together on many similar projects. All thanks to a connection made through ACG New York.
My proudest achievement is working closely with the Chapter executives, Committee Chairs and the Board. I also enjoy the opportunity to serve on several ACG New York Committees and being appointed Co-Chair of a Committee where I work alongside a great friend, mentor and fellow ACG Chapter member.
5. What changes do you foresee happening in the middle market in the next 3-5 years?
It is no secret that all aspects of the financial industry and those who serve the same have been enjoying a period of great success for some time. I frequently attend seminars and events focused on trying to predict when and if a downturn will occur and what some of the triggers and/or results will look like. Given the fact that I’m not a prophesier, I expect that there may be a downturn of some magnitude over the next year or two. I would imagine that those who have been selective and consistent in performing proper due-diligence with business purchases in this lofty marketplace will fare much better than those who have not. My guess is that “if and when” a downturn occurs, it could prove to be both a selling and buying opportunity for those who have properly positioned themselves in the marketplace.