In terms of pure publicity value, David Ross’s latest business investment dwarfs the 19 corporate acquisitions made by the company that bears his family name – even if, by his own admission, he is “probably the most minority owner” in the deal.
The CEO of Ross Video is among the biggest stars in the Ottawa business firmament, heading a video equipment manufacturing giant with customers across the world and annual sales approaching half a billion dollars.
Much of Ross Video’s impressive growth stems from its savvy purchases of complementary businesses, deals often engineered by its chief executive and major shareholder.
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But David Ross’s latest buy is truly in a league of its own. Pending all the necessary approvals, he’ll soon own a part – albeit a small part – of the Ottawa Senators.
Ross and his wife Susan are among a number of local investors affiliated with Toronto businessman Michael Andlauer’s winning bid for the NHL franchise, a group that also includes the Malhotra family, owner of real estate developer Claridge Homes, and Farm Boy co-CEO Jeff York.
Ross, who was approached early this year to join Andlauer’s group, says he couldn’t be prouder to possess a piece of his hometown team.
“It is definitely a unique opportunity that I never thought I’d see,” he told OBJ on Wednesday. “I’m just sort of a guy on the side that was in the right place at the right time.”
Ross’s small stake in the club cements what’s already a strong connection between the team and Ross Video – the Sens also happen to be one of his firm’s most loyal customers.
It’s a reminder that as much fun as being involved in the NHL might be, Ross’s No. 1 priority continues to be finding new ways to grow the company his dad founded in the early 1970s.
Long-term play
As Ross Video approaches its 50th birthday next year, David Ross is also nearing a significant milestone. He’ll turn 60 in April 2025 – the date by which he’s vowed to take the family- and employee-owned company public, a pledge he made to his shareholders nearly a decade ago.
“You sit there and you say, ‘Well, I can’t own the company forever,’” he said, explaining his decision to go the IPO route. “I put a lot of thought into what my options actually are.”
An initial public offering is not for the faint of heart, but Ross believes it makes the most sense for Ross Video over the long haul.
Maintaining the status quo “would just leave a mess for people” once he’s no longer around, he reasons.
Meanwhile, selling the business, merging with a competitor or pursuing a private equity investor all come with their own set of drawbacks, Ross adds – including the potential loss of brand identity and fears that a new majority owner would squeeze spending on R&D, customer service and other areas of the business to pad the bottom line.
“I didn’t want to go through any of those things,” Ross said. “The only thing that preserved who we were, let us grow, let me continue to do what I love to do for as long as I wanted and keep the name, is to go public.”
As cerebral an entrepreneur as you’ll ever meet, Ross didn’t just pick the IPO target date out of a hat.
He figures 65 will be a “reasonable” age at which to retire, meaning he’ll have five years to pilot Ross Video through the growing pains that will inevitably come with answering to the public markets.
The company has been laying the groundwork for the move for years, Ross added.
He notes that if Ross Video can keep matching its impressive average annual revenue growth rate of 17 per cent, it will reach nearly $500 million in sales by 2025 – a major revenue landmark that should solidify the company’s standing in the global market.
“I think we’re well on track for that,” he said.
Ross also lauds the company’s board of directors, which includes well-respected Ottawa business leaders such as Jim Roche and Debbie Weinstein, for its sage counsel. He says the firm has already begun planting the seeds of a public offering in the financial community and believes the market likes what it sees.
‘We’ve got a fabulous story’
“We wanted to make sure we had a really good story for what Ross Video looks like going forward,” he said. “From everything I’ve seen so far, we’ve got a fabulous story for people who want to invest in Ross.”
That story includes a relentless drive for innovation that sees Ross Video spend about 20 per cent of its annual revenues on research and development. The company, which recently opened a new manufacturing plant south of Ottawa in Iroquois, is now heavily focused on building out a platform that allows customers to access its editing and switching technology from the cloud as easily as they can in a physical studio.
Ross also proudly points out that Ross Video’s net promoter score – a market research metric that rates how likely customers are to recommend a company to other users – is double the industry average.
“Between having the right product and showing our customers love, it’s a winning combination,” he said.
As a result, Ross said, while many of its competitors are struggling as major clients scale back spending amid rising inflation and a threat of recession, Ross Video keeps rolling.
The firm’s sales pipeline has grown more than 50 per cent in the last year, he explained, meaning that even as sales cycles drag on longer and fewer deals close, the company is still gaining more business than it’s losing.
“We are seeing a slowdown for sure,” Ross said. “We can see customers are dragging their feet in doing investments in capital. The advantage for Ross is that our pipeline is by far bigger than it’s ever been. That’s translating into not slowing down in a recession.”
Ross anticipates that economic conditions will become more conducive to an IPO by late 2024 or 2025, which would fit hand-in-glove with the timeline he set for himself nearly a decade ago.
“That’s when I’m going to be 59 or 60, so that works out pretty well,” he said.
