A firm's red ink trail to 'excellence'
Frank Sularz is out to prove that small is beautiful, even for a conglomerate.Skip to next paragraph
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His goal is to put together a string of small companies, each filling a particular market niche at a certain level of ''excellence in dynamic technologies.''
This slogan lent itself, in abbreviated form, to his firm's name, Exidyne Inc.
Until recently, Exidyne, or rather, its operating subsidiaries, have been basically in the water business. Exidyne Fluid Technologies Inc. builds purification systems for industries such as semiconductor manufacturers. Exidyne Instrumentation Technologies Inc. produces monitoring instruments used in such industries as water and waste-water treatment.
But two recent acquisitions, one still in process, are moving this Colorado Springs-based firm clearly on course to its founder's original goal of a diversified technology-oriented company.
The new subsidiaries are Exidyne Data Technologies Inc., which will produce portable data entry devices, used by such people as utility meter readers; and Exidyne Bio-Medical Technologies Inc., which will sell a patented surgical product.
It has been this goal of diversification and long-term growth that has kept Exidyne in the red, with operating losses both years since the firm went public in May 1980, despite average compounded growth of 115 percent annually over the past five years. But company officials are hopeful that given a backlog of orders to be shipped this year, they will realize a small profit this year.
Mr. Sularz, an engineer with considerable experience in marketing, was the general manager of a Becton Dickinson division in Albuquerque, N.M., when he began to think hard about the kinds of opportunities that would be available to small companies serving specialized markets.
He knew he wanted a technology-oriented company, but his background didn't tie him to any one kind of technology.
''I left the general management ranks and had to go back to the basics, the basics being finding a specific opportunity to follow, and one of the specific opportunities at that time, the early '70s, was the environmental market - water pollution control,'' he says.
He soon found a company producing an instrument used in water pollution control research. When he and his associates acquired this company, they were able to provide a ''marketing and strategic planning orientation'' and contribute to a slight redesign of the device, which made it more acceptable to a broad range of customers.
He says of the result, ''It established a certain level for us to measure ourselves by.
''The trouble with technology-oriented companies is that they revert to technology when they're in trouble instead of going to the marketplace for answers.''
This should hardly be taken to mean he is not big on technology. Rather, his aim is to find new or emerging companies with strong technological expertise and provide them with the financing and marketing skills they need.
''We end up serving almost as investment bankers for the subsidiaries,'' says Gregg Fries, director of industrial and public relations.
One reason Sularz launched his firm in Colorado Springs was its proximity to Denver capital markets. Exidyne issued its stock at the end of the peak period of the ''penny stock exchange'' two years ago. Aware that Colorado Springs was a coming center for high-tech industry, he also felt that water would become a national policy issue in the years ahead, and that ''Colorado will be heavily involved as water policy decisions are made down the road.''
There is some irony in this: Some of the steam has gone out of the environmental movement, and Exidyne has only a small share of the water purification business generated by the semiconductor producers of Colorado Springs. But Messrs. Sularz and Fries insist that their products stand on their own; none of them are mandated by the Environmental Protection Agency. And Exidyne is working its way into the electronics industry. Fries mentions a major deal just closed with Motorola in Phoenix.
Chamber of commerce official K. G. Freyschlag estimates that some two dozen homegrown support firms have risen up to support the electronics firms who have opened plants here.
''They are basically the ones that build the community,'' says Mr. Fries, ''because they keep on growing, whereas the large company, once they get their facility in, is pretty well fixed.''
Both men are eager to see more venture capital come to Colorado Springs and feel larger companies, which have an interest in building good relationships with vendors, could help bring innovators and backers together in an atmosphere ''without inhibitions.''