Founded in 1998, Stratus Networks has grown to become a leading broadband, data, IT, and voice network services provider for enterprises across Central Illinois. Since inception, Stratus has invested in and built superior network, product offering, ancillary services, partnerships, and proprietary operational systems to deliver the best available service to its customers. The Company owns, leases, and operates a large fiber network to deliver a full suite of solutions including data, cloud and voice solutions. “They’ve achieved significant scale serving 950+ highly diversified enterprise customers primarily across financial services, healthcare, and telecom markets.”
Stratus Networks owns and operates its own ~600 route miles, state-of-the-art fiber backbone business hub that delivers a variety of voice and data solutions, depending on each customer’s unique operating requirements. In addition, Stratus has Interconnection agreements with some of the largest service providers in the country, empowering businesses to connect locally, nationally, and internationally.
Headquartered in Peoria IL and founded in 1998, Stratus Networks was launched by a group of telecommunication professionals who saw an opportunity to provide better, simpler, and more responsive services. Stratus was founded and has been led by John Petrakis and Kevin Morgan, local entrepreneurs with the mission to be the nimblest, “superior customer experience” focused telecommunications carrier In the Industry, while ensuring credibility within the communities they serve.
They have been servicing the needs of clients while building and expanding a boutique fiber optic market throughout the central United States. In 2013, Stratus Networks added construction as a service, allowing the business to become the premier carrier in Central Illinois with a state-wide fiber ring with spider webs throughout Illinois. Those developments have given Stratus complete control over their customer’s experience and ensuring the best service possible. Stratus prides itself on long-term relationships and interconnection agreements with carriers big and small throughout the country, allowing clients to connect seamlessly – locally, nationally, and internationally. Businesses of all sizes place their trust in Stratus for their Data, Voice & Cloud communication service needs.
As Stratus continues to grow and expand, they stand by the founding principle of providing a dynamic corporate culture, emphasizing extraordinary customer service while offering the latest services in demand. They give back to communities by supporting local schools, non-profit organizations, and national charities.
A diverse mix of blue-chip corporations place their trust in Stratus for all their communications services from MultiLinQ, Direct Internet Access, Hosted PBX, Voice, Ethernet Services, DDoS and Managed Services
STRATUS NETWORKS STORY
Since the Company’s founding in 1998, Stratus has been a leading broadband and IT services provider for enterprises and communities across Illinois. As a customer centric business, over the years, management invested and built a network, product offering, partnerships, ancillary services, and proprietary operational systems in order to deliver the best available service to its customers.
A Note from the Founders on what makes Stratus unique:
- Service Level – Stratus ensures customers have the best possible experience. From the first conversation with a prospective customer to annual reviews, Stratus has developed a culture where the customer is truly the most important aspect of the Company. Without the customer there’s no company. At Stratus, if there is a need to adjust the product offering to meet a customer’s need or service them in odd hours, they will do whatever possible to win and then make them happy for years to come
- Core / Backbone – Stratus has developed their core network so it wouldn’t fail, but if something happened beyond their control it still wouldn’t fail. Stratus has redundancy in all layers of the network, in many cases, there are 3-4 paths in and out of communities. In the past 10 years, the core network has never failed. Stratus has never lost a market to a fiber cut or other issue. Having a stable network is key to their success. They can confidently stand in front of a prospective customer and tell them Stratus’ network is the best.
- In House Construction – Stratus Networks has a dedicated construction and splicing company (Stratus Networks Construction Services) that can respond instantly to assist customers. Stratus decided early on that they can control their destiny, timing, and service levels better if they invested in their own construction company that does their builds. This gives Stratus the ability to keep costs low for customers by owning and controlling fiber networks.
- Proprietary Software – Stratus’ internal and external customer data bases are home grown to meet every conceivable need of the business. The software allows Stratus to service customers internally and accurately provides a customer facing portal to provide real time network data. In addition, the software manages and integrates various operations functions across the business.
- ICB Pricing / Network and Revenue Analyst Department – Stratus has a goal to win every piece of business at the highest possible margin. They have over the years gathered a database of competitive intelligence that allows them to have a high level of educated knowledge of where they need to be to win without leaving revenue/margin on the table.
- Network to Network Interface (NNI) – Stratus knows that many of their customers want them to service all their locations not just the ones that can be serviced on their fiber, therefore Stratus has integrated their fiber network with a significant number of NNI’s. Unique NNI partnerships allow them to service a broader range of multi-site opportunities and win new business. In some situations, Stratus is the only carrier with a solution of fiber to all locations.
- Proprietary Network Interface Device (NID) – Stratus realized years ago that customers need change, and they can provide a higher level of service if they develop a NID that can provide as many levels of service as possible. Stratus has developed a NID that can provide virtually every service provided. Therefore, they don’t need a truck roll and can quickly change/add services remotely.
NovaCap partnered with Stratus Networks in October 2021. Stratus has grown to become a leading data and voice networking services provider for enterprises with a full suite of products including data, cloud, and voice solutions.
“The accelerated digitization of our economy is driving the demand for robust digital infrastructure services to feed the digital value chain. The transaction will enable Stratus to expand its presence in growing market segments and larger geographic areas to meet the increased demand for connectivity,” commented Ted Mocarski, Senior Partner at Novacap. “We look forward to applying Novacap’s strategic, operational and financial expertise to propel Stratus’ growth.”
Stratus Networks is at the precipice of a significant growth inflection. Kevin Morgan and John Petrakis have positioned Stratus as the leading fiber and telecom services provider, squarely in the middle of a geographic market eager for fiber services, In the midst of massive tailwinds across the Industry. Stratus reputation for customer service has created a referenceable and referral credibility that Is leading to a large revenue acquisition pipeline of organic growth. This success has led to market awareness and Interest for acquisition opportunities leading to adjacent market, contiguous growth. This extended connectivity of Stratus’ network Introduces multiple opportunities to leverage for value creation. As the organization is facing this growth curve, Stratus recognizes many operational and organizational efficiencies to achieve which predictably will return sustainably larger margins on the business as It matures.
Stratus gains a substantial advantage of NovaCap’s precedent experience as a successful investor in regional fiber-optic providers such as Horizon Telecom, FirstLight Fiber and Fibrenoire. NovaCap has the resources necessary and shares the vision of Stratus becoming the premier provider of internet and voice services in central IL. Novacap has already begun sharing ideas about ways to invest in our business to aggressively pursue the significant growth opportunities available.
Simply put, Stratus relies on serving the customer better than any competitor. This starts with their values, which were put in place before their launch in 1999 and lead everything that they do. Our values are Honesty / Integrity / Service / Responsiveness / Reliability
STRATUS IN THE NEWS
Company: Better Banks
Stratus Client: Since 2002
Company: Better Banks Contact: Daniel Fischer, IT Director
Stratus Client Since 2002 A network of banks that dates back as far as 1898, Better Banks prides itself on fulfilling early visionary Chip Backlund’s philosophy of continuously growing and evolving to fit customers’ needs. Local is Better Early on, IT Director Daniel Fischer, had been giving…
Company: Knox College
Stratus Client: Since 2014
Contact: Steve Hall, Vice President and Chief Information Officer
At first glance, you might think Knox College is just a traditional liberal arts college in the Midwest. However, from a business communication standpoint, Knox VP and CIO Steve Hall will describe it as, “a unique and dynamic environment; a multi-national business with…
Company: Connor Co.
Stratus Client: Since 2007
Contact: Julie Driscoll, Director of IT Stratus Client
Since 2007 The Connor Co. has a long history of successful business, beginning back in the Depression-era, 1936. While growing and evolving to offer plumbing, HVAC and Industrial PVF supplies and logistics, Connor Co. retains the strong family values and “stick-toitiveness” that got them…
Company: Business Builders
Stratus Client: Since 2014
Contact: Jennifer McCarron, President Stratus Client
Since 2014 Business Builders, based in Bloomington, IL, is a full-service marketing and sales outsourcing firm that has been providing tools and support to successful companies who wish to communicate effectively with their market since 1985. Their relationship with Stratus Networks began in July of 2014….
Founded in 1981, Novacap is a leading North American private equity firm with over C$8B of AUM that has invested in more than 100 platform companies and completed more than 150 add-on acquisitions. Applying its sector-focused approach since 2007 in TMT, Industries and now Financial Services, Novacap’s deep domain expertise can accelerate company growth and create long-term value. With experienced, dedicated investment and operations teams as well as substantial capital, Novacap has the resources and knowledge that help build world-class businesses. Novacap has offices in Montreal, Toronto, and New York. For more information, please visit www.novacap.ca.
NOVACAP’S ongoing success is due in large part to their disciplined and proactive approach to generate growth. They’ve had remarkable precedent success leading telecom organizations to include Horizon Telcom, Firstlight Fiber , and Fibrenoire
CHIEF EXECUTIVE OFFICER
Reporting to the Board of Directors, the Chief Executive Officer (CEO) is responsible and accountable for formulating and communicating the vision of Stratus Networks during this crucial growth, integration, and value creation chapter. From this vision the CEO will develop and implement the proper business plan and delivery methodology to achieve specific revenue and profit goals. Additionally, the CEO will present monthly reports reflecting actual vs forecasted performance plans on revenue acquisition and operational improvements and adjust based on the on-going needs of the business. The CEO will be responsible for supporting the business with the right talent and will strategize and participate with the management team in the areas of sales, technical support, customer relations, supplier relations, and specific problems or opportunities involved in the day-to-day business.
The CEO will step in to fulfill and optimize the remarkable legacy and vision Stratus Networks co-founders created. He/She will integrate the previous accountabilities John Petrakis and Kevin Morgan divided and conquered.
- John is a lifelong Peorian and was front and center in many of the communities that Stratus serves. As such he successfully ran retail sales and all customer facing departments and was involved with the daily decision making and operations of the company. He built out the network and revenue analysis department which has been key in the company’s success in sales and pricing. He also oversaw Stratus Construction.
- Kevin hails from Austin TX. He previously had a background in Sales but evolved to be Stratus’ operations leader, responsible for finance and accounting, regulatory, and legal affairs. He also led engineering of core network components related to network deployment and oversaw programming.
This CEO will be a durable and credible executive with leadership characteristics to affect positive inertia, instill a vision, empower a culture, and continue Stratus Networks’ commercial momentum in the market from both a sales and financing standpoint. We are looking for an exceptional executive leader with a track record of leading the operational optimization and performance of an integrated telecom services provider.
More specifically, the CEO will:
- Establish more deeply refined performance criteria relative to achieving the business plan with the Board and hold senior management accountable for its successful execution
- Identify and capitalize on appropriate market opportunities that leverage current capabilities and expertise to expand sales and enhance the company’s valuation
- Provide overall leadership, acumen, action and working environment necessary to build an overperforming enterprise which provides true customer value and market acceptance
- Articulate the company’s business plan, competitive advantages, and vision to the Board and investors, ensuring the company raises additional capital at appropriate valuations
- Develop and execute annual business plans and budgets for all revenue streams
- Establish realistic annual performance goals for each value chain
- Develop the marketing strategy and tools to support the business plan
- Financial planning, analysis, and reporting to the board on a frequent basis
- Manage profitability and operating expenses within budget and reports monthly, quarterly, and yearly variances
- Develop a competitor database within the markets that the company services and validate the information with the sales and management team
- Identify and maintain relationships for continuing business opportunities with key accounts
- Identify, evaluate, and establish strong supplier relationships with the company’s Channel partners and suppliers
- Develop and support the company’s value chain integrated strategy that supports the company’s growth strategy
- Recruit, train, develop, coach, mentor, manage and promote highly competent management team members
- Participate in major proposals and presentations
- Act as a key strategist to company sales and marketing to formulate strategies and programs, identify resources, resolve crises, and execute plans
- Conduct regular communications with the management, sales, operations, services, and technical team to ensure an aligned vision for the company as a whole
- Continuously advance credibility of Stratus Networks’ value proposition in the market through industry education
KEY QUALIFYING CRITERIA
Event – Demonstrated value creation with a PE backed IT services organization resulting in a liquidity event (recapitalization, strategic sale, IPO)
M&A – History of mergers, acquisitions, and/or other inorganic growth strategies of which the outcome aligned with the thesis of complementary or accretive value creation.
Integration – Demonstrated success and expertise leading the strategy and execution of integrating geographically dispersed people, process, products, systems, and cultures.
Strategy – Historical Go-To-Market (GTM) plan authorship, collaboration, organization, delegation, and successful execution in a high growth environment resulting in scale.
Revenue – A commercial minded executive with a history of identifying and maturing products and services offering with the market for distinct competitive advantage.
Operations – History of achieving high CSAT/NPS scores through progressive, efficient, and profitable delivery of automated ITIL best practices.
Entrepreneur – A creative and humble thought leader who listens first and remains eager to run lean, test, empower, delegate, explore, fail fast, and innovate progressively.
Culture – A passionate servant leader and culture creator, with the gravitas necessary to facilitate alignment of a formative stage organization’s purpose and outcome orientation.
Leadership – History of inspiring high performing talent toward transformative business successes, including, at times making unpopular decisions.
WHY CONSIDER THIS OPPORTUNITY WITH STRATUS NETWORKS?
Kerosene – All the foundational elements of a scalable telecom platform, from a customer, product, service, and talent standpoint are in place offering a myriad of opportunities for an experienced CEO to steer toward scale and maximum value creation.
Health – Stratus Networks’ benefits from strong recurring revenue growth along with healthy pipelines in all aspects of products and services to leverage, strengthen, and lengthen which offers an opportunity to focus on strategic growth initiatives.
Growth – Dramatic opportunities to extend the existing organic revenue acquisition playbook as well as executing acquisition opportunities of contiguous fiber network in adjacent markets leading to exponential growth potential in the near term.
Clay – Stratus Co-Founders and NovaCap have curated strategic acquisitions offering the opportunity for a CEO to mold into their vision of a highly innovative and multi-dimensional customer fiber services provider servicing the broader needs of the region.
Multiplier – Acquiring and integrating adjacent telecom players into a regional platform generates topline synergies, network effects, operational efficiencies, cost savings, and ultimately a multiple uplift at scale.
Timing – NovaCap identified Stratus Network’s unique position and timing in the market and has effectively resourced actionable plans for acquisitions and introductions of new services that leverage current customer demands.
The compensation package for the Chief Executive Officer will include a highly competitive annual earnings opportunity comprised of a base salary, annual performance incentives, benefits, and long-term incentive compensation in the form of equity participation.
Following a thorough exchange of information relating to company information, resume, and key qualifying criteria, CFS Partners anticipates recommending a short list of candidates to NovaCap’s Partners in November 2022. They will down select to a short list to be introduced to members of the Senior Partners and subsequently arrange finalist meetings in person. The selected finalist will be presented with a compelling offer contingent on clean reference and background checks.