New Jersey's finest: Top 40 -- Pro Communications Inc

Abstract

F. Scott Fitzgerald did not know William Robertshaw. Had the two men met, Fitzgerald might never have written his famous line about there being no second acts in American lives. At age 67, Robertshaw, a former building contractor, has embarked on a second career as chairman of ProCommunications, a telephone-answering services firm in Princeton that has seen revenues shoot up a stunning 5,900% in a little more than three years. In the process, he is also writing a second act for an industry that many people thought was dying. (excerpt)

F. Scott Fitzgerald did not know William Robertshaw. Had the two men met, Fitzgerald might never have written his famous line about there being no second acts in American lives. At age 67, Robertshaw, a former building contractor, has embarked on a second career as chairman of ProCommunications, a telephone-answering services firm in Princeton that has seen revenues shoot up a stunning 5,900% in a little more than three years. In the process, he is also writing a second act for an industry that many people thought was dying.

In this age of voice-mail and smart answering machines, who needs the humble, local, phone-answering service? That was the prevailing wisdom when Robertshaw entered the business in 1992. He had just sold his interior construction business, Sweetwater Construction--a Top 40 winner in 1992--and decided to help his daughter Barbara revive a struggling phone-answering service in Maryland. Maybe because he was an outsider, Robertshaw saw the answering-service business differently than people who had been in it for years--he recognized that the industry wasn't dying, but changing direction.

In the past, an answering service just took messages for busy people, a function that voice-mail now performs more efficiently. But an answering service armed with the latest telecommunications technology can do much more. For example, a service firm in Maryland can answer calls for a doctor in New York who may be driving to Vermont, take down a message, and zap the text to the doctor's pager. Phone operators in California can take 800-number orders for a mail-catalog company in Maine. Answering services can work as broadcast-fax bureaus for small businesses in their area. They can provide employment hotlines to pre-screen job applicants, or work as electronic bulletin boards giving out meeting information for associations that want to save on staff time.

Robertshaw recognized that if a firm had enough capital to invest in state-of-the-art technology, it could set up a nationwide network of answering services providing an array of high-value services. But the industry was splintered into locally owned, mom-and-pop firms that were starving for capital. What the industry needed was someone with deep pockets to create what could effectively become the next generation telephone-answering service.

It was a powerful, contrarian vision--and Robertshaw sold it to a group of venture capitalists. In the fall of 1994 Edison Venture Fund in Lawrence bought stock in the company and is now the single biggest investor. In January New York City's Lawrence Smith Horey and the Penn Janney Fund of Philadelphia took another 20%.

Robertshaw and his team have spent the last three years turning ProCommunications into the answering-service firm of the future. In 1993 it had 30 employees and revenues of less than $1 million. Today it has some 700 employees, and revenues for this year through June touched $30 million. "We hope to close the year at $50 million," says Robertshaw.

Much of this growth is the result of an aggressive acquistion drive. ProCommunications has taken over seven small firms in California in the San Francisco-Los Angeles area, three in Colorado, and 10 in Texas, among others. "We are growing rapidly in Baltimore and Washington, D.C.," Robertshaw says. "Our sales in New York City this year are $7 million, but next year we expect to have $15 million."

Asked if such rapid expansion is risky, Robertshaw replies: There are no risks in this. It's just like opening McDonald's restaurants. You have a successful formula, and you apply it. You use a lot of common sense, and you make fast decisions without thinking too much."

Richard Fox, president of the PennJanney Fund, says Robertshaw knows the business so well that he can complete an acquisition in about a week. "But these are not hasty decisions," Fox adds. "He has been talking to these companies for years, and he knows their numbers. People in the industry trust him."

To keep up with its rapid expansion, ProCommunications is strengthening its management team. It has hired Joel Schleicher, former chief operating officer of Rutherford's Nextel Communications, which created a similar nationwide network through acquisitions in the wireless mobile radio market. Schleicher, the new CEO, says he will be "assimilating the acquisitions to grow the cash flow and maximize opportunities."

ProCommunications plans to continue buying up companies, and Schleicher says negotiations are going on with companies with annual revenues of "$2 million to $50 million." Robertshaw expects that in three years ProCommunications will have revenues of "hundreds of millions of dollars."

Most venture-capital-funded companies go public at some point, and ProCommunications is also planning to go public. Asked when that might happen, Robertshaw says: "All the elements are in place. It could be in six months or in 18 months." If the company keeps growing at its present pace, Robertshaw could retire a very rich man after his firm goes public. That is, unless he decides that some American lives have third acts.