Jeffrey Rossi, a certified public accountant, currently leads the consumer and industrial practice, as well as the transaction advisory services practice, for New England at CBIZ Inc. The practice is one of the largest national professional services firms in the country, with more than 120 offices and nearly 7,000 employees nationwide, offering integrated solutions in accounting, tax, advisory, benefits and insurance.
Rossi specializes in delivering transaction and assurance services to companies in the manufacturing, construction and consumer products sectors, with a particular focus on Tier 1 automotive, aerospace, defense, as well as food and beverage manufacturing and distribution. He has extensive experience working with both privately held and private-equity-owned businesses, with an emphasis on driving substantial enterprise value for his clients.
PBN: Can you explain the concept of enterprise value and why it is crucial for business leaders to focus on it?
ROSSI: Enterprise value is essentially the price a willing buyer would pay a willing seller in an arm's-length transaction to acquire 100% of the entity. It's a comprehensive measure that reflects the overall value of a business, including its equity, debt and cash. Focusing on enterprise value is crucial for business leaders, as it provides an integrated view of a company's market value and helps in strategic planning and decision-making processes.
PBN: How can investing in technology and automation drive higher valuations for a business?
ROSSI: Investing in technology and automation usually results in higher transaction multiples, leading to increased valuations. Modernizing a company makes it more efficient and profitable, thereby increasing earnings before interest, taxes, depreciation and amortization. Additionally, adopting technology and automation can mitigate workforce shortages and talent gaps, which in turn reduces risks and enhances value.
PBN: What strategies can business leaders employ to enhance their market position and demonstrate growth potential to buyers?
ROSSI: A company's reputation for high-quality, on-time delivery can significantly enhance its market position. Most transactions allocate a considerable portion of the purchase price to goodwill, which is directly related to the company's market position within its industry or market segment.
PBN: How can building a strong management team influence the perceived value of a business?
ROSSI: Buyers typically invest in people, and having a strong, qualified management team can greatly enhance enterprise value. The strength of the management team is crucial for the future viability and profitability of the business, making it a significant factor in value assessment.
PBN: What are some common pitfalls that business leaders should avoid when preparing for an exit transaction?
ROSSI: A common pitfall is attempting to take a company to market without the assistance of an investment banker. Investment bankers add value beyond their fees, as they are experts in the market process and can drive up enterprise value by attracting multiple buyers through a competitive process.
Matthew McNulty is a PBN staff writer. He can be reached at McNulty@PBN.com or on X at @MattMcNultyNYC.
