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Markey's sells off sales unit: Move by audio-visual firm creates new tech company

March 20, 2006

Markey's Audio Visual, a south-side company that's decked the stage for some of corporate America's flashiest meetings and conventions, has sold its equipment sales and integration unit to a new firm owned by a competitor and by a family member.

Sensory Technologies is held by Anne and Andy Sellers, principals of Indianapolis-based Video Images LLC-and by Kevin Markey, who headed Markey's sales and integration.

The sale last week, for an undisclosed price, allows the 47-year-old Markey's to focus on its equipment rental and staging business, said CEO Chuck Markey Jr.

Its crews travel from coast to coast to set up equipment and provide technical services for events such as large shareholder meetings at convention centers. Clients have included Delta Faucet, Eli Lilly and Co., Hilton Hotels Corp., Lincoln Financial and the NCAA.

About 45 of Markey's 200 U.S. employees are impacted by sale of the equipment sales and integration unit. It was not clear how many will join Video Images, a 25-employee firm that will be known as Sensory Technologies.

Video Images, based at 6951 Corporate Circle on the northwest side, already was one of the region's largest providers of videoconferencing systems. Its clients include Indianapolis-based Barnes & Thornburg and New Yorkbased Merrill Lynch & Co.

Neither Chuck Markey nor his business will have an ownership interest in Sensory Technologies.

The Markey brothers have focused on two distinct parts of the family business over the last several years: Kevin on equipment sales and Chuck on equipment rental and staging. The sale of the equipment division isn't about sibling rivalry, according to the family, noting that Kevin maintains his stake in Markey's.

"I'm really happy for Kevin. He enjoys the sales side of the business ... if you focus on what you do well, it's much better for both companies going forward," Chuck Markey said.

Markey's in recent years recorded about half its income from rental and staging and the other half from sales and installation. Markey's estimates 2006 equipment rental and staging sales will be in the range of $12 million to $15 million, after the separation.

Markey's and Sensory plan an alliance to boost each other's business, said Anne Sellers, managing principal of Sensory. While both will maintain distinct business, they plan to share offices in cities where one has a presence and the other doesn't, including Fort Wayne and Dayton.

They also plan to steer business prospects to each other. The firms have already placed a joint bid on a resort project in Sandusky, Ohio, Chuck Markey said.

Video Images was started in Milwaukee in 1974. In 1999, Anne and Andy Sellers, who owned half of the company's Indiana operation, bought all of Video Images' shares.

Markey's pushed deeper into selling audio and visual equipment used by businesses in the 1980s. Recently,

Systems Contractors News

named the company to the "Top 50 Systems Integrators" list.

In the early days, Markey's sold individual pieces of equipment, such as a projector.

But now, those components can be purchased from a growing number of competitors.

"A lot of the equipment you can buy on the Internet," said Chip Roth, president of Indianapolis-based Esco Communications Inc., a larger competitor of Video Images, with 130 employees.

So what tends to distinguish competitors and determine their growth "is the support, service, engineering and implementation," added Roth.

His firm has also seen growth opportunities in videoconferencing for schools for so-called distance learning projects.

Video Images installed a videoconferencing center for Chicago private equity firm Willis Stein & Partners that included plasma monitors and voice-tracking cameras.

It has also provided "telemedia" carts for Riley Hospital for Children in Indianapolis. It equipped sophisticated control centers for the Illinois State Police and for that state's emergency management center.

Some of this new generation of systems allows doctors at remote locations to see in detail how a patient looks. Lawyers during videoconferences might not only want to view documents, "but to see how somebody responds from a physical standpoint," said Derek Paquin, business development manager at Sensory Technologies.

"The way technology is going in general is more toward total integration with [information technology], with communications systems and with the Internet," Sellers said.

"The business has changed so much in the last 20 years," Chuck Markey said.

Even the firm's bread-and-butter rental and staging business has transformed.

In 1959, his mother, Martelle, started a 16mm film distribution house and launched her own movie rental firm, Markey's Ideal Pictures. In the late 1960s, she bought an overhead projector for a local hotel manager who needed it for a meeting.

The rental business took off in the 1970s as the city's convention business grew.

These days, Markey's crews truck around the country equipment such as digital light projectors that can put on a convention center wall a Godzilla-size image that would make the Wizard of Oz feel inadequate.

They also deploy sophisticated robotic lights that can paint an entire room with multiple colors and patterns, well beyond what's typical at a rock concert.

At annual meetings, they roll out wireless voting devices for shareholders. They can also set up hundreds of computers, should a company need them at an event.

Markey's said it has a commanding chunk of the convention-related business in Indianapolis; Columbus, Ohio; and Des Moines, Iowa.

"We have crews out of state every week," said Mark M. Miller, general manager, glancing at a U.S. map dotted with pins. "We doubled in size in rental and staging in the last seven years and we expect to double again in seven years."
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