Training Associates Riding High With IT Wave
Vic Melfa of The Training Associates expects to add 100 employees next year.
Between 2010 and 2012, annual revenue at The Training Associates grew from $19.5 million to $71.2 million, an increase of 265 percent. And if CEO Vic Melfa gets his way, the company's growth over the next five years will blow those numbers away.
Melfa said the Westborough-based firm, which provides trainers with expertise in a huge variety of IT subjects to companies of all sizes, landed some particularly juicy contracts recently and is looking for funding to move the business to a different level.
“We have a great opportunity now to scale significantly: 100 percent-plus per year,” he said. “We are talking to private equity groups to help fund that.”
How has TTA gotten on this growth track? Melfa said it started 20 years ago when he began thinking about the growth of computer technology and how much training companies would be demanding in related skills.
“We developed this company with a unique model that is able to identify and develop and manage training professionals quicker, faster, cheaper, better than anybody in the world,” he said.
Essentially, TTA's business involves connecting more than 25,000 independent IT trainers with the companies that need their help. Recruiting, vetting, testing, assigning, paying and rating these professionals is, obviously, a vastly complicated task. Not surprisingly for such a technology-focused company, one of its most significant resources for getting all these things done is a massive, custom-designed software system TTA has developed over two decades. Clients can find trainers in their area with the precise skills they need, at the price point they want, with work history, qualifications and student evaluations to prove their abilities.
“What they allow us to do is to limit our commitment to unproductive staff positions in order to meet the broad cross-section of technical topics that we need to deal with,” said Roland Van Liew, president of Hands on Technology Transfer, a Chelmsford TTA client for more than a decade.
Van Liew's company is dedicated to training people in the IT skills they need on the job, but it doesn't always make sense for him to hire staff to do the training. What he needs are pinch hitters with specialized areas of knowledge who he can bring in only when he needs them. But to find those specialists himself would take time and energy, and if they didn't turn out to be good at the job, it could create big problems for him.
“That's the old model,” he said. “That's from the 1980s and it doesn't work very well.”
Demand from clients like Van Liew has expanded TTA's business, and it now has satellite offices in Washington, Chicago, San Francisco, and Miami, and even a one-person office in Europe. Its network of trainers extends worldwide, and about 10 percent of its business is outside the U.S.
Expansion — at a fast pace — is one of the goals of the company's current search for a private equity partner. TTA has been down a similar road before. In 2000 and again in 2007, Melfa said, he and his children, who own stakes in the company, looked at selling it or arranging some other form of partnership with another entity. In the end, those plans didn't move forward. Although a number of private equity firms looked at the company in 2007 thanks to its quick growth, Melfa said the value they assigned the company didn't live up to the family's expectations. And, he said, his side was proven right. Revenues have tripled since.
Melfa now says he wants to sell only a minority stake in the company, mostly from his own shares. At 77, he said, he's getting ready to move from being CEO to “an active board member.”
Melfa now expects to officially go to market around the end of the year and to make a deal with a private equity firm within, perhaps, six months after that. “It depends on so many factors, none of which are standard,” he said. “Everything is unique in the M&A field, especially in the IT M&A field.”
If all goes well, though, Melfa expects to hire as many as 100 new employees next year, most of them in Westborough. He also plans to begin opening other offices in the Midwest and on the West Coast. Over the following five years, he said, his plans call for TTA to become a half-billion-dollar-a-year company, then either go public or sell part of its stock to a larger public equity firm.
“That's where I spend most of my time,” Melfa said. “Talking to M&A advisors, investment banks ... I'm an expert at it now.”
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