Tyco acquires Fisk Electric to boost telecom work Tyco Electronics Corp., Harrisburg, Pa., has announced plans to bulk up its telecom systems installation capabilities with the purchase of Fisk Electric Co., Houston, one of the largest electrical contractors in the United States.
Tyco said the purchase of Fisk Electric, ranked by CEE News magazine as the 10th largest electrical contractor in the United States in its 2000 Top 50 listing of electrical contractors, is part of its ongoing strategy to become the dominant single source, full-service system integrator of electrical, data, audio/video, sound, lighting and HVAC control systems.
Headquartered in Houston, the 1,800-employee Fisk Electric relied on telecom installation work for 22% of its $212 million in sales in 1999, according to Engineering-News Record magazine. The company also has facilities in Dallas, Las Vegas, Miami, New Orleans and San Antonio. In recent years, Fisk Electric has participated in several high-profile electrical construction projects, including the Houston Astros' Enron Field in Houston and the Venetian Hotel and Casino in Las Vegas.
Tyco Electronics said Fisk Electric's experience in servicing telecommunications companies such as Southwestern Bell, PSINet, MCI/WorldCom and AT&T will accelerate Tyco Electronics' system integration relationships with future world-class customers.
James McNamara, vice president of the Tyco Electronics Wire and Cable Group, said the acquisition will help Tyco balance its revenue generation between product sales and expanded system integration services.
"Fisk Electric is one of the most highly respected names in the electrical construction, technology infrastructure and service maintenance industries," he said. "As a result, we're extremely well positioned as a single-source solution provider to handle the infrastructure needs of a much broader set of customers."
Cabling firms win work rewiring small businesses A new breed of voice/data installers is focusing on rewiring the offices of small- and mid-sized businesses with high-speed broadband connections.
New York-based OnSite Access is one of the leaders in the rush to serve the mostly ignored "little guy" with a menu of services previously available only to Fortune 1000 companies.
Formed in 1996 with investors that included FrontLine Capital Group, J.P. Morgan Investment Group, AT&T and Microsoft, OnSite Access made a big splash early this year by rewiring the Empire State Building. They aimed not at the big-name tenants, but at the hundreds of small to mid-sized firms in the famous landmark.
During its first 90 days in operation in the building, OnSite signed up 110 of the roughly 800 tenants at the Empire State Building for services including digital subscriber lines for high-speed Internet access, virtual private networks, Web hosting and voice lines offering wholesale local and long-distance rates. If the company's current track record is an indication, more than 40% of the tenants will have become OnSite customers by the end of its first year in operation.
The Empire State Building joined the more than 350 office buildings in major cities throughout the United States and Canada serviced by the company. The rewiring of these buildings has not been happenstance, however, said Rick Miller, the firm's chief financial officer.
A collective profile of a building's tenants is created to determine what the company's penetration would be, and for what services. Also, it helps if no other broadband companies are providing services at the time, he said.
Once a building is selected, a contract is negotiated with the building's landlord to declare OnSite as "preferred provider" for a 5% share of revenue generated from the building network the first 12 to 18 months. When the contract is inked, the building is ready for rewiring.
"Typically, we use local contractors to install the cable," Miller said. Both copper and fiber-optic cabling is installed "to meet immediate needs and provide for future technologies."
Installation of both wiring mediums has been the difference between OnSite's operational strategy and that of some of its competitors, Miller said. Some of the new broadband companies install only the more-expensive fiber-optic cable, which may be beyond the budgets of small businesses, he added.
OnSite's strategy has attracted investment capital from at least one telecommunication giant. In September, the company signed a three-year strategic commercial agreement with AT&T that gives it "a national footprint in the wholesale process," Miller said. AT&T is investing $50 million in OnSite Access through a combination of equity financing and senior secured debt. OnSite plans to use these funds to continue its market expansion.
Other large broadband providers don't share OnSite's strategy of offering both copper and fiber-optic cabling, and have wedded themselves to fiber-optic technology. One of those companies is Bethesda, Md.-based eLink Communications. After wiring about 200 office buildings across the United States, eLink Communications recently announced plans to offer services in Europe.
Another competitor, IntelliSpace, New York, also plans to expand into Europe after wiring more than 400 other buildings, including New York's Rockefeller Center, Jacob Javits Convention Center and Lincoln Center.
Why have these companies and many more hopped on the small business broadband bandwagon? "Because it's an under-served market," said OnSite's Miller, "and easier to penetrate. Look at Fortune 1,000 companies like Pepsico. All of the very big phone companies are pitching their services to them."
Meanwhile, these companies seemed to have ignored small businesses, he said, with only 17% of these firms even having dial-up service to the Internet. Audrey Curtis, eLink's chief technology officer, agreed. With only 3% of commercial office buildings more than 10,000 square feet offering tenants broadband access, she said, "eLink believes a significant opportunity exists to provide broadband services to a targeted audience of small- and medium-sized businesses."
OnSite's Miller dubbed the situation "the early stages of a dynamic revolution," with most small businesses unaware of how the advances in communication and data services can help them become more efficient. He likened the current situation to the advent of personal computers in the 1980s.
Meanwhile, he said companies like his own would likely become less numerous.
"I expect consolidation in the industry," Miller said. "It's the normal thing to happen."
Continuing its thrust into the telecommunications market, Tyco International Ltd, Hamilton, Bermuda, agreed to acquire Lucent Technologies Inc.'s Power Systems (LPS) business unit for $2.5 billion in cash. The acquisition was expected to close by Dec. 31, 2000.
Tyco Electronics division manages several well-known electrical brands, including AMP, Augat, Buchanan, Potter and Brumfield and Raychem, which Tyco has acquired over the past few years. LPS, a leading supplier of power systems in North America, provides energy solutions and power products for telecommunications service providers and for the computer industry.