OREM -- Like the carpet it cleans, Venturi Technologies is vacuuming up the pieces of a fractured industry through acquisition.
The Utah County firm's latest and 14th purchase -- the Denver-based Martin & Peterman Inc. -- nearly doubled the size of the company.More acquisitions are in the pipeline, Venturi President John Hopkins says -- at least eight by the end of the year that will add another $30 million to the company's annual revenues.
Nearly 50,000 carpet cleaning companies operate in the United States with a combined annual gross revenue of $10 billion.
The industry is so split there isn't a sole company that has more than 2 percent of the total market, said a Venturi representative.
The Orem-based publicly traded company ended last year with $6.3 million in revenues, said Gaylord Karren, chairman and corporate executive officer.
Martin & Peterman ended the year with $10 million in revenues.
Hopkins foresees 30 acquisitions next year. Venturi acquires only healthy carpet cleaning companies and retains their management to continue the revenues.
"If they don't stay, we don't purchase," Hopkins said.
The MPI acquisition added 140 "team members" to Venturi's staff of 270. "We don't call them employees," Hopkins said.
Venturi paid $8 million for MPI, including cash, stock and notes. The acquisition will give Venturi a stronger presence in the multi-family and commercial market and take it into states where it had no presence.
Prior to the buy-out, Venturi operated only in Utah, California and Texas. Now, the company will gradually assimilate MPI bases in Florida, Oregon, Washington, Arizona, Nevada, Georgia and British Columbia. The base in Las Vegas will be the first to convert.
With each acquisition Venturi replaces the acquired company's trucks and cleaning equipment with its own red-painted trucks and unique cleaning system.
The company has 96 trucks now and 360 trucks ready for service. Another 184 trucks are on order. By the end of 2000 the company should have 1,500 trucks in service, Hopkins said.
That's a lucrative order for Vortex Engineering of Salt Lake City, which equips the $53,000-a-copy trucks with specialized carpet cleaning equipment. The company later installs its cleaning system.
Rather than using detergents or chemicals, Venturi uses a non-toxic disinfectant with electrically-charged water that breaks down dirt and sanitizes the carpet. Then a powerful vacuum pushing and pulling air heated between 190 degrees Fahrenheit to 204 degrees Fahrenheit at 1,000 pounds per square inch cleans, sterilizes and rinses the carpet at the same time.
Karren said the company used the laws of physics, technical pressure dynamics and fluid mechanics to its advantage in developing the trademarked process they call VenturiClean.
Venturi got its start in 1992 when Hopkins and Karren were two property managers in Texas. They managed 3,000 apartments with 2.5 million square feet of carpet. Keeping all that carpet clean was a major problem, Karren said.
"We were frustrated consumers," Hopkins said.
Carpet cleaners didn't give the pair the solution they needed -- to clean and dry carpet quickly without damaging the fibers -- so they turned to existing technologies to find a solution.
As they put the company together they tested their cleaning techniques on the apartments they managed. Meanwhile, they moved their families to Orem where they eventually incorporated Venturi Technologies in 1995.