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?
I am the national leader of our private equity group (PEG) practice and a partner with the transaction advisory services (TAS) practice at Plante Moran, the 11th largest accounting and consulting firm in the United States. As leader of the firm’s private equity practice, serving over 525 clients and 1,000 portfolio companies, I oversee a team of more than 380 industry experts, partners, and staff to ensure we consistently provide value to our PEG clients, both across their portfolios and throughout the transaction life cycle. I’ve been an ACG member since 2008.
2. What exactly do you do and what you are known for across your firm?
As a TAS partner, I help private equity funds and financial buyers assess acquisition risk and determine sustainable post-acquisition EBITDA run rates. Both within the firm and among clients, I’m known for my expertise in, and passion for, untangling complex, unusual, or “messy” accounting issues uncovered during due diligence. Since becoming a partner in 2014, I have more than doubled the revenue of my book of business. Approximately 30 percent of the deals I work on are healthcare support organizations (HSOs) in several specialty areas. Other areas of expertise include service companies with long-term contracts and manufacturing. My client base has grown largely through referrals, niche expertise, and practice development efforts at ACG events. Clients appreciate my, and the firm’s, “no-surprises” approach and our ability to be flexible on the scope and deliverable for engagements. Regardless of deal size, I view every engagement and interaction through the same lens, always asking myself — and coaching the rest of our team — to ask, “What if this were our money?”
3. What are some of the big challenges that you’ve encountered in your career?
The biggest challenge for me — and I think this holds true for a lot of us in the industry — is that success takes time. You have to understand that things don’t happen overnight. They don’t even happen in a year necessarily. It takes years upon years of planting seeds. In those early days, I was traveling all the time and going to networking events and asking for meetings — it was daunting, and I was out of my comfort zone. To get comfortable, I joined the ACG Detroit programs committee to get more involved in the local M&A community, and I spent a lot of time in New York attending ACG and Capital Roundtable events. The seeds start growing slowly. You work with one client and do a good job, and you get others and do the same thing. I would say it’s 50 percent doing good work and getting referrals, and 50 percent boots-on-the-ground efforts and just taking the time to develop your business. We had a vision, a really clear vision, but even with that, it was hard then to picture what we’ve built and what it looks like today. It helped that I developed a specialty in physician practices, and I was becoming known for that — in addition to the firm’s specialty in manufacturing, particularly in the middle market. I made sure to stay up to date on industry news, so when I would meet people, I was up on current events and had a viewpoint on industry trends and what we were seeing in our own practice. Knowing what you’re talking about and being prepared helps build your confidence. It also helped that I wasn’t alone; I had more experienced people with me.
4. What key trends or opportunities have you observed in the PE industry, especially the middle market?
PEGs are becoming much more specialized and focused on particular industries to invest in. You really have to be an expert in the industry to increase the value post-acquisition when you’re paying the kind of multiples we’re seeing. I’m also seeing a lot of clients moving toward the lower end of the middle market and putting together two companies that may be on the lower end of the EBITDA range to build a platform and create value that way. From a due diligence perspective, that kind of buy-and-build strategy is great for business. Clients have to make strategic acquisitions in order to have a good IRR when they go to sell. They have to work harder to find deal flow, and with more deal flow comes more integration. So, you have to be really good at integration post-acquisition. Operationally, it’s more difficult. There are fewer opportunities today for finding that big platform at a reasonable multiple and growing it organically. There’s also a lot of activity in healthcare, among physician practices. That, too, takes a lot of specialization. You have to be up on reimbursement trends in particular specialties, and the industry as a whole faces unique challenges by its nature. A physician practice is different from a manufacturer.
5. What’s your biggest secret to success?
It might sound cliché, but it really does take hard work — being passionate about deals and loving the work and the clients. I honestly think about my clients’ investments as if they were my own money. And, I think they feel that — they know I want them to be successful. Ultimately, I’d have to say their success has been the biggest factor of my success. How we treat our clients’ targets, the sellers, is really important and differentiates us as well. We’re an extension of our clients’ teams. From the seller’s perspective, they don’t separate us from the private equity fund, so how we interact with the seller, how we conduct ourselves, and how we build a rapport and enlist their help getting the job done without complications is really important.
6. Most significant accomplishments?
Prior to transitioning to lead the firm’s national private equity practice, I led our New York private equity team. I strategically grew our presence in this competitive market, developing and leading a purpose-built team in a grass-roots, boots-on-the-ground effort that resulted in a 50 percent increase in the number of private equity firms served since 2013 and a nearly 100 percent increase in revenue in the same time frame. I’m thrilled to say the team was recognized with the 7th Annual ACG New York Champion’s Award for CPA Firm of the Year in 2017. Recognition of our success in New York in less than five years! I’m also extremely proud to have been included in Mergers & Acquisitions 2018 Most Influential Women in Mid-Market M&A. The 35 women I was profiled with on this list represent the women dealmakers with the strongest track records, the biggest footprints, and the most promising futures in middle-market finance. I was selected as the ACG Detroit 2018 All Star Advisor of the Year.
7. What do you think are the biggest obstacles in the middle market today?
One of the biggest obstacles in the middle market is competition for deal flow, which is driving multiples up. This has led to more funds employing a buy-and-build strategy, requiring more operational expertise to lead integration efforts to be successful. Investments in the back office, i.e. ERP systems, are necessary upfront to more easily integrate the add-ons.
8. What changes do you foresee happening in the middle market in the next
I wish I had a crystal ball to tell you! Most M&A professionals believe that an economic downturn is coming — we’re just not sure when. Therefore, many sellers are feeling a sense of urgency to sell in order to capitalize on high multiples. However, the high multiples are giving many buyers pause, and they’re looking for opportunities to grow companies organically. If the downturn does come, these buyers will come off the sidelines, which may help drive activity during that time. We also see advanced data analytics being used in diligence, deal sourcing, and portfolio operations to drive efficiency and value creation.
9. How has ACG helped you in your career?
ACG has been extremely helpful in my career by providing great networking opportunities. Whether directly or indirectly, many of my clients today are the result of attending an ACG event. And from a firm perspective, being a sponsor of ACG has helped us gain brand recognition and increased our visibility in the market.