As Edward Pratesi recalls it, he was a sophomore at the University of New Haven in the mid-1960s with an errand to run at the local post office.
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As Edward Pratesi recalls it, he was a sophomore at the University of New Haven in the mid-1960s with an errand to run at the local post office.
He saw an older man reading the Wall Street Journal, which Pratesi — who was majoring in accounting with an eye toward a master's degree in business administration — had never perused. Pratesi enquired about the nature of the newspaper. When the man said it was recognized as the bible of the business world, Pratesi started reading the publication daily.
A half-century after that fortuitous interaction, Pratesi can be found most days at his North Main Street office in West Hartford. He is managing director of UHY Advisors N.E. LLC, a tax and business consulting firm, with a growing focus on business valuations. Offices are located around the world.
As a young man, Pratesi used the Wall Street Journal for research in evaluating businesses in which he and his father would make modest investments. Some of those investments helped pay the then $500-a-semester tuition at the University of New Haven. Today, evaluating businesses is a big part of what Pratesi does for a living. His firm is carving a niche in helping emerging and seasoned entrepreneurs add value to their business; and guiding mature businesses in making wise strategic acquisitions.
Tax-advising and business expansions are many times connected, he said.
“I love the challenge of strategy development; really identifying and assisting business owners in understanding their value,” Pratesi, 68, said. “That's the fun part of it. To assist them strategically so they can increase value.”
A growing sector of the business is exit planning, specifically the acquisition or sale of a business.
“Exit planning has sort of become a new industry and a logical place for us to be,'' said Pratesi. “In some cases, some businesses can't be sold, but they can be transitioned. So, we embark on a mission to devise and develop our own program tailored to meet the client's need.”
For example, his firm is working with a company looking to make a $15 million investment to acquire a Massachusetts distribution plant. Distribution, manufacturing, architectural and insurance firms are among Pratesi's clients. Revenue has been growing about 5 percent a year, he said.
The Connecticut office has two partners — Pratesi and longtime colleague John Salemi — and nine employees. There are well over 60 UHY offices around the globe.
Negotiations can be complicated when brokering a sale and determining the real value of a business. But, Pratesi said, they don't have to be nasty.
“It has to be a win-win situation,'' he said. “If it's not win-win for both of us, we're basically wasting each other's time. Part of the negotiation is not asking for things you can't get from a buyer. Rather, you ask for things that are reasonable. It doesn't mean that you don't negotiate, but you stay cognizant about what a buyer is looking for — and also what we are looking for as a seller.”
Pratesi's knowledge of the acquisition game is deep and personal.
UHY acquired his former accounting firm Pratesi, Salemi & Co. LLC — John Salemi was the partner — in 2016. (Pratesi initially launched his sole proprietor accounting business in 1982.)
The purchase of his firm went relatively smoothly because Pratesi and Salemi had an exit plan and started the process for selling two years before actively looking for a suitor.
There are many variables in assigning a value to a business, but Pratesi's core four are:
• Management that is willing to accept change.
• The uniqueness of the product or service.
• Good core team and culture.
• Financial condition of a company (and its location).
He and wife Donna reside in Cromwell, with no children, but eight cats. This tax and acquisition expert jokes that one day he has to find a way to claim the animals as deductions. Each morning, Pratesi wakes up at about 5 a.m. to work out; and is in the office by 9 a.m.
The goal for the new year and near future is to “keep the flow of new work” and understand the nuances of a proposed presidential tax reform plan if it becomes reality.
In the meantime, there will always be a Wall Street Journal that will have Pratesi's attention.
Stan Simpson is the principal of Stan Simpson Enterprises LLC, a strategic communications consulting firm. He is also host of “The Stan Simpson Show.”
