Resilience Capital Partners doesn’t invest in flashy, high-tech startup companies.
Even so, the private equity firm wanted to tap into the exploding demand for digital data. That’s a big reason why Resilience has been scooping up companies that build and maintain the infrastructure that allows that data to travel around the world. The Beachwood-based firm has acquired five companies fitting that description over the past two years. And during that time Resilience has been weaving them together in an effort to turn the geographically scattered group of businesses into a major player in a booming industry. “This is a very low-tech way to participate in a high-tech world,” said Steven Rosen, who is co-CEO of Resilience. The combined company — Aero Communications — already is one of the larger contractors that provides infrastructure services to telecommunications companies. A few big examples include Dycom Industries and MasTec Inc., two publicly traded companies that have seen their stock prices take off in recent years. But overall, the industry is “highly, highly fragmented,” according to Doug Campbell, senior vice president at Resilience. So the private equity firm saw an opportunity to buy up some of the small players and combine them into a company that could provide more services to a broader geographic area. Resilience put the core piece of its strategy in place nearly two years ago, when it bought the assets of Advanced Communications in Canton, Mich., which is east of Ann Arbor. That company — which employed 1,150 people at the time — immediately became Aero Communications. And over the past year, Aero has bought four more companies. Today, the combined business employs about 1,700 people. Aero announced its most recent deal last week: Aero just bought Fulton Technologies, which employs 75 people in the Chicago area. That deal illustrates one of Aero’s strategies: The company has been beefing up its ability to build and maintain wireless networks — one of Fulton’s specialties.
In 2012, only 35% of Aero’s revenue came from building and maintaining wireless networks, according to Rosen.
Now that number is about 50%, he said, noting that the other half comes from services Aero provides to cable companies. The company took another step toward broadening its wireless capabilities at the start of the year, when it acquired Mill City TEC, a Minnesota company that specializes in building and maintaining cell towers. Now those “tower climbers” can use their skills on jobs in other states where Aero operates, according to Campbell, who sits on Aero’s board. They also can help train colleagues who previously worked for other businesses, he said. Aero also is buying companies in different parts of the country as a way to cover more territory. Though the company can serve the entire continental United States, most of its business comes from 15 states. “There was a really small equivalent to Aero in every market,” Campbell said. And soon some of them could fall by the wayside: Campbell noted that telecom companies are trying to buy more services from fewer companies — a trend that favors larger contractors that operate throughout the country. Rosen agreed that telecoms want “more capabilities and a broader reach.”
Resilience also is playing an active role in trying to help Aero increase those capabilities.
Soon after Resilience bought the assets of Advanced Communications, the firm hired longtime telecom executive Greg McCray to replace founder Michael Falsetti as CEO. It also replaced several senior executives at the company. Since the purchase, Aero has replaced many of its aging vehicles, and it has started using software to make sure those vehicles are routed in the most efficient way possible. Resilience — which typically takes an active role in running the companies it owns — also helps Aero manage its human resources efforts and other functions. Will Aero buy just as many companies next year? Campbell wouldn’t say, but he noted that the company is looking for good deals. “We’re inquisitive about other opportunities,” he said.