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Anyone entering the large U-shaped brick building of Telegroup North these days will feel a noticeable lightness in the air. Gone is the dejected gloom of a company in lay-off mode. Instead, a new enthusiastic buzz and exhilaration seem to have taken hold.
"There's a growing sense of renewal and excitement in the company," says Alan Hickman, exclusive agent in Telegroup's in-house sales. "Telegroup has really begun to blossom again. It feels like the company has turned a corner."
In its new incarnation as a division of Virginia-based Primus Telecommunications, Inc., Telegroup appears to be digging its roots even more firmly into the Fairfield soil. Primus recently invested about half a million dollars in a new state-of-the-art data center in the former Chappell Studio Building in the Fairfield Industrial Park. In addition, Primus has plans for moving other businesses currently being operated from the East Coast to Fairfield. And most notably, after a long string of lay-offs, Telegroup is back in hiring mode thanks to Primus.
"We want people to know that we are committed to the community," says Denise Boerger, Vice President of Primus and the new General Manager of Telegroup, who brings 15 years of managerial experience in major telecom companies to her position. "Telegroup is a major hub for Primus, and its biggest division in the U.S. We definitely want Fairfield to be our partner in the global expansion Primus is undertaking."
Turning a Corner
From its humble origins in one of the spare bedrooms of co-founder Fred Gratzon in 1989, Telegroup in the early '90s became one of the fastest growing start-up companies in the U.S. In the company's first year of business, sales revenues barely reached $5,000. But as if touched by a magic wand, the company suddenly took off, and over the next seven years, sales revenues soared to over $200 million.
Throughout the growth of the company, co-founders Cliff Rees and Fred Gratzon adeptly tackled the legion challenges associated with managing a company expanding at warp speed. At the same time, they endeavored to adjust and expand the company's focus and strategy to the rapid changes in the telecommunications industry. Things were on a roll, and on July 8, 1997, Rees and Gratzon became the first business founders in Fairfield's recent history to take their company public.
However, just as Telegroup appeared to be firmly launched on a growth trajectory, it fell victim to the perennial bane of start-up companies: cash flow problems. In 1998, the company was caught in the nationwide credit crunch triggered by the Asian crisis. Unable to raise the money it needed to service existing loans, the company laid off some 140 employees, and ultimately was forced to file for voluntary bankruptcy under Chapter 11 in February of 1999.
Under Chapter 11 status, the company was able to continue normal operations. Meanwhile, the leadership team worked with New York-based turn-around specialists Alvarez and Marshal to find a way to secure the future of Telegroup. The solution came in the form of Primus Telecommunications, Inc., a global telecommunications company, which in July 1999 completed its purchase of Telegroup.
The purchase did not signal an instant end to the company's growing pains. However, there are many signs that integration phase is drawing towards a close.
"Obviously, the transition wasn't always smooth," says Hickman. "Even under the best of circumstances, it's never easy to integrate two companies. But it quickly became clear that Primus' leaders were committed to Telegroup. So now, the feeling is, 'That was then, this is now. Let's get on with business.' People are looking to the future."
A Company on a Roll
Indeed, what started out as an accidental marriage might well turn out to be a match made in heaven.
"Telegroup has a lot to offer in terms of its people, agent services, technology, and distribution network," says Boerger. "But Primus is bringing a lot of added value to the company. Primus offers a mix of state-of-the-art telecom and Internet services that complement and extend Telegroup's existing offerings and carry the company into the next millennium."
Primus Telecommunications Group was organized in 1994. The company offers long distance services, high-speed Internet access, and a number of other competitively priced telecommunications services to business and residential customers. Primus has sales representatives and customer service offices in the U.S., Canada, the United Kingdom, Germany, France, and Australia, where it is the fourth-largest long distance company. The company's annual sales revenues exceed a billion dollars. According to Boerger, the long-term objective of Primus is to become a leading global provider of telecommunications services, including long distance, Internet, data, and other services. The global telecommunications network the company has built is one of the most advanced in the world.
Primus is on a growth spurt, acquiring, creating joint ventures, and making strategic investments in companies that fit its long-term vision. The company recently announced strategic alliances with two companies offering state-of-the-art Internet technology. It made a strategic agreement with Akamai Technologies, Inc., a leading provider of high performance Internet servers for delivery of Internet content and applications. With this agreement, Primus becomes the largest single network carrier to deploy Akamai's servers in its global network. Primus also recently created a strategic partnership with Pilot Network Services, a company which offers what is believed to be the most advanced Internet security available today. With these two strategic alliances, Primus has positioned itself to offer high-bandwidth, optimal performance Internet access and secure business-to-business e-commerce to a rapidly growing global customer base.
Primus is ranked 1 of 122 in its industry group by Zacks, an investment analysis company, and its stock price more than quadrupled in 1999.
"Primus is extremely well strategically positioned to become one of the most significant global companies offering integrated telecom solutions," says Boerger. "Telegroup has become part of something very big."
Meanwhile, Boerger, who moved to Fairfield about five months ago, seems to have weathered her own transition from the Primus offices in sunny Florida to wintry Iowa very well.
"Fairfield is a neat community," says Boerger, who herself grew up in a "one-stoplight kind of town," as she puts it. "It's like a well-kept secret. Nobody would dream that you'd find the people potential and the entrepreneurial spirit that are here. I'm really looking forward to getting to know the community better."
