Seeing a Private Company Through Two Rapid-Fire Deals

The CFO of a growing contact-lens distributor talks about leading the firm through an acquisition and a large merger in the same year.

About a year ago, Paul Sherman had a once-in-a-career opportunity. As the CFO of ABB Optical Group, he had just finished shepherding ABB, the largest contact lens distributor in the United States, through a sale to New Mountain Capital, a New York-based private equity firm. And then, the day after the sale closed, the phone rang at New Mountain.

Paul Sherman, CFO of ABB Optical

Paul Sherman, CFO of ABB Optical

It was the investment bank of Optical Distributor Group, the number two contact lens distributor, Sherman says. ODG wanted to merge. “At the time we would have thought that we would have continued on our acquisition track, that maybe we might have been able to acquire numbers three, four, five, six and seven in the industry. But we straightaway flipped into due-diligence mode and made [a merger with ODG] a priority,” Sherman says.

It’s a tall order, pivoting that quickly. But Sherman has quickly shifted gears many times throughout his career. His role changed several times in the 10 years that he worked at Burger King Corp. Sherman moved from internal accounting manager to vice president of finance of the corporate restaurants division and then to VP of operations excellence. He also has a wealth of experience managing private-equity-owned firms, including several years as finance chief at real estate company LNR Property, acquired by Cerberus Capital Management in 2005.

Now that ABB and ODG have merged, Sherman’s shifting back into organic growth mode. When he started at ABB in late 2009, the firm had about $350 million in revenue. Today, it’s a billion dollar company and hopes to grow to $2 or $3 billion.

CFO spoke with Sherman about his strengths as CFO and the company’s plans for growth. The interview, edited for clarity, follows.

Tell me a little bit about what ABB does.
We’re dedicated to being the premier optical industry platform. We supply 30,000 eye-care professionals, retail stores, hospitals and universities with brand name contact lenses and other optical products, and tailored business solutions. Very simply, doctors go to school to learn to treat diseases of the eye and to help patients. They come out of school and they face the chaos of managing a business. We serve as independent trusted advisers. We bring order to their chaos and help them to become better businessmen and women because of the services and advice that we provide.

What does that mean exactly? What kind of advice do you give them?
We help them to set retail pricing. We share data and benchmark their practice against the top 500 practices in the country. So they see the trends of the industry. So it’s not a case of ‘doctor, take our word for it.’ It’s ‘look at what your peers are doing.’ It’s helping them understand the manufacturers’ promotions and how they can best purchase [the manufacturers’] products based on those promotions. Or we provide the website for their customers to place orders. And because we service them with each of the manufacturers’ products, they can have all the products in one box, one bill, one shipping charge, rather than going to four different manufacturers.

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