Kelly’s XBSS to combine IT with telecommunications
Anthony Kelly and his partners are on a buying spree (Daniel Roach & Chuck Hildebrant).
Kelly, the founder of two successful technology companies in the mid- to late-1990s, is back on the entrepreneurial trail — completing four acquisitions over the past four months.
“That is a tough one for anyone to manage,” said Kelly, who sold one of his companies, A.F. Kelly, in 2002. “The next few months will be focused on stabilizing our infrastructure.”
The four companies will be merged under one new company called XBSS, Xpert Business Solutions & Services LLC.
Kelly said the companies have a total of about 75 employees and have garnered $12 million in total revenues over the past 12 months. He said he hopes the new company can earn $18 million in revenue in its first year and reach $50 million in revenue by the third year.
The new venture aims to marry information technology and telecommunications, said Daniel Roach, one of Kelly’s partners. Chuck Hildebrant, majority owner of the Florence Freedom baseball team, and Rich Hempel, former president and COO of A.F. Kelly, also are partners in XBSS.
This venture is the latest entrepreneurial undertaking for Kelly. His first company, Kelly-Level & Associates Inc., was sold to a Cleveland company in 1998. Following that, he helped found A.F. Kelly in 1998, a Florence-based company that was approaching $20 million in annual sales before Kelly sold it to Indianapolis-based Haverstick Consulting in 2002.
Kelly said the funding for the four acquisitions was handled by the group. A second phase of funding next year might be pursued from outside investors.
One of XBSS’ base offerings is ERP, or enterprise resource planning software, which is an integrated software solution that can help companies manage their resources. The company has developed a software package for IBM’s Tivoli product and also is working on other software development projects, Roach said.
The company’s second focus is on telecommunications, especially the business development of wireless fidelity, or Wi-Fi. These types of projects would allow businesses to operate wireless internal networks for all employees.
Roach said XBSS’ main thrust will be on marrying the two concepts — creating software solutions that can incorporate a wireless infrastructure.
“This is a unique vision,” Roach said. “People have a hard time grasping it at times.”
Kelly said that after talking to many companies, he found most are unaware of the benefits of using the two technologies together, a strategy that can help when integrating new systems.
“It made sense. As I talked with a lot of these companies, they were going through the pain as I was talking to them,” Kelly said.
Each of Kelly’s acquisitions was designed to augment XBSS’ core focuses.
One of the first purchases, Dirigo Inc., was located in Cincinnati for nearly a decade and focused on IT product development and software.
Another acquisition, VentureCorp Communications, is a wireless services company based in Tampa, Fla. The third acquisition is a cabling division of a Columbus-based firm.
Kelly said he couldn’t release details on the fourth acquisition because the deal has not been finalized.
One key to success for Kelly is keeping on board the entrepreneurs who built the companies he is buying.
“We want them to be as excited about this as we are,” Kelly said.
The company will be focused on systems for midsize companies, which have revenues ranging from $25 million to $1 billion. He said the company also recently was approved by the General Services Administration to sell its service to the federal government. The GSA handles billions of dollars in contracts for federal government products.
George Molinsky, an attorney with Taft, Stettinius & Hollister LLP, is familiar with the realm of technology startups. He founded Main Street Ventures, a high-tech startup accelerator, in 1999 and serves as chairman of the organization’s operating board.
“These guys are off to a flying start because of the relationships they already have developed,” said Molinsky, who helped structure the company’s acquisitions. “They were a startup company a couple months ago, but they’re a real and growing company now. They’re poised for explosive growth.”