PSI's Founder '95 Percent Sure' Of Going Public By 9/05
VenVest Inc. is the holding company of PSI, as well as its Benjamin Franklin franchise spin-off, and AirTime 500, PSI's counterpart aimed at HVAC contractors. AirTime members were meeting in an adjacent room as Abrams spoke, and later heard a similar presentation.
Abrams' vision of a public company resembles ServiceMaster in structure. Like ServiceMaster, VenVest would be the corporate parent overseeing operating companies spanning various trades. The plumbing firm would adopt Benjamin Franklin's brand name, while the HVAC sector would do business under the recently minted "One Hour Air Conditioning & Heating" brand. Also included in the public company would be an electrical arm drawn from members of Electricians' Success International, another VenVest creation, and, Abrams told me, another trade group soon to get started by VenVest. He declined to identify the trade due to ongoing negotiations.
Abrams acknowledged the poor track record of IPO-driven consolidation in the PHC industry, but believes VenVest can succeed where GroupMac, ARS, et. al, failed by presenting an organization better synchronized operationally.
"Many people are down on consolidation, but they overlook the fact that (the previous wave) attracted $6 billion of outside capital to our industry," Abrams told PSI members. "The company I founded (Service Experts) is now the world's largest retail air-conditioning company, with $736 million in annual revenues. Investors are still interested in our industry, and they will be coming again.
"We are building a home services company as a 'house of brands' that I can sell on Wall Street," he continued. "We have built VenVest into a $65 million company with no debt. I can go to Wall Street with a track record of success."
Abrams was confident that the IPO would take place in September 2005, but then hedged slightly by saying it was a "95 percent probability," allowing for unforeseen setbacks due to terrorist attack or other political-economic upheaval.
Paving the way for the initial public offering, Abrams informed members that VenVest is in the market to buy some of its constituent companies that meet desired criteria. VenVest's first effort was the acquisition of an $8.3 million HVAC company in Las Vegas that had been in business for 32 years under the name Quality Air Conditioning. Research showed 11 percent name recognition in the market at time of purchase. VenVest changed its name to "One Hour Air Conditioning," and VenVest co-founder and marketing specialist John Young predicts name recognition to rise to 25 percent under the new identity.
Branding Imperative: Abrams' remarks about the public offering came amid a detailed assessment of the PHC marketplace past, present and future. According to him, there are some 60,000 plumbing companies doing business in the United States, and those numbers haven't changed much in recent decades. However, their opportunities are diminishing due to the impact of big box retailers, utilities and other plumbing merchandisers. Those entities are now going after service work as well.
In response, VenVest is attempting to link its companies to consumers via strong brand identities centered on themes of security and convenience. "People want confidence in who they let into the home, and I think a Yellow Pages ad with a promise just to show up will have an impact in today's world," Abrams said. Thus, Benjamin Franklin's marketing positions the brand as "The Punctual Plumber." Reliability also underscores the "One Hour" name for their HVAC franchise.
Abrams said the one- to three-man shop will survive, and offers opportunities for contractors to earn a good living if run right. He challenged PSI members to decide whether that is their goal. If not, he urged them to aim to be one of the top three companies in their market to assure a prosperous future. Companies in between will be in trouble, was the implication.
Fifth Anniversary: The Nashville meeting celebrated PSI's fifth anniversary. Membership now hovers around 500 firms for PSI. Some 450 people attended the Nashville event, which featured numerous educational and training programs spread over six days from Sept. 13-18. VenVest also held "Success Days" recruitment drives coinciding with the events, picking up 31 new PSI members and 49 for AirTime 500.