CBIZ: Why a top investor wants buybacks stopped and M&A restarted

CBIZ ($CBZ) has a public shareholder proposal from Reference Equity's Ryan Bunn: stop the stock buybacks at 9x earnings and restart the M&A machine that compounded revenue at 13% a year and pushed EBIT margins from 9% to 14% over the last decade.

For a market that reflexively rewards buybacks, the pitch to issue equity instead lands like a contrarian bet. Bunn argues the math is clear. The $2.3 billion Marcum acquisition – the largest accounting deal ever – left the stock down roughly 70% since its announcement, saddled with 3.4x leverage. The question is whether the multiple compression came from the debt load or from AI headline risk spooking the sector.

Bunn's thesis: the market is pricing credit risk, not business risk. Small bolt-on acquisitions at 6-9x EBITDA, funded with equity at no discount, restart the compounding flywheel. A delevered balance sheet and a re-rated multiple, he calculates, gives CBIZ 100%+ upside from here.

The counterargument is whether AI lets the Big Four move downmarket and eat CBIZ's middle-market lunch – or lets superstar producers hang their own shingle. Bunn sees the second risk as the real one, and says the fix is the same: grow faster through M&A before the talent dispersion accelerates.

Reference Equity's full model and the podcast conversation are available to paid subscribers of Yet Another Value Blog. The transcript is AI-generated initially and replaced with a professional edit when available.

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