It was an arranged marriage, of sorts. The owners of RT Cable Corp. and Katec Inc. -- installers and servicers, respectively, of cable television systems -- had known and liked one another for years. Both companies were leaders in their fields; both were also veterans of the INC. 500 list.
"They were two businesses born to be coupled together," says Ronald Katz, former Katec president and now head of RT/Katec Inc's converter repair division.
"Individually, we didn't need to consolidate," echoes former RT chairman and chief executive officer Roy Tartaglia. "I think we could have made a nice living for ourselves. But in [the cable TV installation and service] industry, there isn't any company that's been a total turnkey operation. And I wasn't interested in becoming [just] a $20-million-to-$30-million-a-year company. I feel we can hit $100 million in a couple of years." At present, they are at $17.6 million and climbing, up from $9.6 million last year.
As the company expands, the owners have taken care to create their own niches within the organization. The company now has five "pretty autonomous" divisions."The only difference is that we now all work for the board," says Katz. "The synergy that the partners have is incredible," adds Tartaglia.
Katz and Tartaglia started creating that synergy back in the early 1970s, in East Orange, N.J. Cable television was only a bright promise when fraternity brothers Tartaglia and Richard Thomas started RT on the premise that customers should "feel like they have a part in how the job was going to be done." Meanwhile, Katec was blossoming into one of the largest converter-repair businesses in the country and beginning to work directly with the manufacturers of converter systems.
But while both RT and Katec prospered on their own, changes in the cable industry soon forced them to think about repositioning themselves. After the industry's initial boom, many cable companies began finding it difficult to sustain themselves. Construction slowed down, and changing technology meant that older systems would have to be rebuilt. Tartaglia and Thomas decided that the best way to grow was to develop a service organization that would cover all facets of cable. As it turned out, Katz wanted to move in the same direction, and so RT/Katec was born.
But the union of the two INC. 500 companies is just the beginning. Individually, five of RT/Katec's nine major investors also own local cable franchises, and they are discussing acquiring others as a group. In the meantime, the company has opened offices from Florida to California and made two more acquisitions this year: Communications Construction Group Inc., a construction and engineering firm, and Premier Telecommunications Inc., a long-distance resell company. And they have added another cable entrepreneur to their management team -- Robert Bilodeau, founder of Suburban Cable Vision, who joined the company as CEO last spring.
CORRECTION-DATE: January, 1985
In the December 1984 issue, Stephen J. Sherman should have received credit for the photograph on the lower left of page 77 and Spider Martin/Black Star should have received credit for the photograph on page 78.
DONNA FENN | Inc.com Contributing Editor
Donna Fenn is the author of Upstarts! How GenY Entrepreneurs Are Rocking the World of Business and 8 Ways You Can Profit From Their Success, an exploration of the ways Gen Y is changing the entrepreneurial landscape.