Louis F. Mercatanti

Peter Martin & Symedco

Corrections or additions?

This article by Barbara Fox was published in U.S. 1 Newspaper on

November 3, 1999. All rights reserved.

On the Rebound, Peter Martin finds a Backer

Top Of Page

The plane hits the tarmac at Newark Airport, and a

first class traveler from Japan switches off the phone at his seat

and opens a package delivered by the stewardess. It is the cellular

phone that he will use for the next three days. As soon as he leaves

the plane and heads for customs, he starts making calls.

Asians and Europeans are even more addicted to their cellular phones

than Americans are, but because their phones are not compatible with

United States systems, overseas travelers are often left stranded.

Either they punch in endless codes on pay phones, borrow a phone from

an American business associate, or wait until they reach their hotel

rooms to get or make important calls. A company called NOWfone,


in Nassau Broadcasting’s old building on Witherspoon Street, has a

nifty solution — affordable short-term cell phone rentals for

overseas visitors, delivered to the airport or the hotel.

It’s an interesting concept for a business plan that promises fast

growth. Even more interesting are its backers — two men who have

endured the experience of having fast-moving businesses explode in

their faces. Louis F. Mercatanti Jr., a high flyer who had his wings

clipped in the early ’90s, has incubated and bankrolled NOWfone. Peter

S. Martin, the founder of Symedco, saw his fast-growing firm Symedco

go bankrupt in the same time period; he now is the president of


(National & Overseas Wireless Fone).

Mercatanti says he is backing Martin because of — not in spite

of — the Symedco debacle. Having navigated stormy waters himself,

he picks investments based on similar scenarios. "I back a couple

a year. Given my experience, I wouldn’t touch a business plan unless

the people involved had a problem in the past. That is the best


to predict how they would react to a problem now," says


Top Of Page
Louis F. Mercatanti

Based at 619 Alexander Road, Mercatanti’s company, Nassau Holdings,

owns one-third of Nassau Broadcasting, comprised of 20 radio stations

including WHWH-FM, WPST-FM, and WNJO-FM. It also has what he terms

"significant investments," and he has some new surprising

plans for expansion — including going into the local and long

distance telephone business. But in the late 1980s and early ’90s

the Mercatanti empire looked like it might topple. "It was mostly

financial, some real estate difficulties, with not enough attention

to detail," he says now.

Mercatanti, 43, grew up in Trenton, attended American University,

and worked at a Ford dealership and an electric car research firm

before investing in two ice cream companies and a liquor importing

firm. In 1986, at a time when he was a relatively unknown investor,

he bought out the 80 percent share of Herb Hobler, founder of Nassau

Broadcasting, for $8 million and put almost no money of his own into

the deal. In a leveraged buyout arrangement he took out a $7 million

loan and gave Hobler a $1 million note. When he continued to make

other real estate investments, he upped his loan to more than $9


Then came the real estate bust. Soon Mercatanti was facing sheriff’s

sales (for 140-144 Nassau Street, for instance). Then there was a

nasty legal imbroglio with the other owner of Nassau Broadcasting,

Johnny Morris, who ran the radio stations. To untangle this mess,

Mercatanti found a buyer for the stations, but the deal fell through

in another nasty snafu of charges and counter charges. Every week,

it seemed, Mercatanti was in the headlines.

"I have seen how difficult it is to go to work when you are not

happy and no one else is happy," says Mercatanti with atypical

understatement. "It is a special person who is able to jump back

in the saddle. I did that, and that is why I can talk first


Getting out of difficulties means hard work: "You roll your


up, parcel out what you can, make deals where you can." He keeps

pointing out that "it takes a special kind of person" to


from financial woes, and he deems himself that kind.

Top Of Page
Peter Martin & Symedco

Both Mercatanti and Martin had to contend with


family law problems during that time period. Shortly after Mercatanti

had his worst business troubles, he watched Martin go down. He had

seen Martin found and grow his medical publishing business, Symedco,

and he believes Martin was given bad financial advice, tried to do

too much too soon, and lost focus. He emphatically believes that


was not "by any means" a failure. "The clients all loved

his company, and I am talking about the big pharmaceuticals. The


thing to find, the customers, he already had."

Born in Spain, the son of an infantry general who later went into

politics, Peter Martin anglicized his name when he came to the United

States and worked for a medical communications firm, Excerpta Medica.

In 1983 he and Ann Wallace founded Symedco; she left in 1986 and in

1988 he moved the firm to a prestigious building at the Forrestal

Center. In 1989 he won the Ernst & Young Entrepreneur of the Year

award, had 23 employees, and did $8.7 million of business.

But though his firm quadrupled in size, it did not even double its

gross revenues. Employees complained publicly about working conditions

and charged Symedco with wage and hour violations. Critics charged

Martin with mismanagement and overspending, but Symedco supporters

said that the company was suffering because the pharmaceutical


had drastically changed. UJB Financial cut off a $1 million line of

credit (prematurely, Symedco officials claimed) giving Symedco no

choice but to file Chapter 11, in part, to meet payroll. Then came

Chapter 7 and a closing of the doors in November, 1993.

Martin’s business difficulties were compounded by a bitter divorce,

followed by the death of his father in Spain, and he spiraled into

a depression. "I was defeated on all fronts," he says now.

"I had nothing to hold onto. It was not only a professional


but very hard personally. I am beginning to believe in myself again.

What is important is not how many times you fall, but how many times

you get up."

Contrary to rumors circulating at that time, Martin says he did not

leave the United States and did not take any money out of Symedco.

He says that when he was down and out, his family in Spain sent money

for him to live. "They liquidated my assets," he says, adding

sardonically, "when Symedco fell, three other companies grew out

of it. There is a saying in the old country, from any fallen tree,

everybody makes wood."

Mercatanti now says he was ready then to put money on the table to

help Martin save the firm. "I thought it was a company that just

needed a little stability, and I think we could have brought that.

But Peter was not prepared to slug it out and try to get the business

back together again," says Mercatanti.

After Symedco’s fall Martin came to Mercatanti with some other ideas,

but Mercatanti set a high gate for any future investment. "I said,

when you are prepared to roll up your sleeves and sit down in an


then come and talk to me. Until then, ideas are ideas, like a plane,

easy to take off but very difficult to land."

Eighteen months ago Martin got to the point in his recovery process

where he was ready to put his shoulder to the wheel of an idea. The

idea he had — cellular phones for foreign travelers — came

to him when he was in Germany, needed to make an important call, and

had to wait three hours until he got back to his hotel. Cell phones

that work in any country, such as the Iridium satellite phones, are

prohibitively expensive. What if travelers could get short-term


With Martin ready to "roll up his sleeves,"

as Mercatanti had specified, Mercatanti gave NOWfone incubator space

(including access to the supply closet and a computer) plus some


time and a bank account. That was in 1997. A formal agreement was

drawn up in 1998 for Martin to do the legwork on a consulting basis.

"Last June I presented a business plan," says Martin. "I

will be grateful to him for life."

"I was buying a business plan, not one that was technology driven,

but marketing driven. I felt very good about being that conduit,"

says Mercatanti. "I gave him time, supported him with a couple

of employees, some space, corporate oversight, and capital." He

estimates that he provided more than $250,000. "Next thing you

know, we have a business."

"Lou has a very good sense of where he is taking the company,

good vision, and good management," says Martin. "I know he

is not in it for a quick exit."

Because of Mercatanti’s ongoing relationships with the Federal


Commission, national and international licenses were speedily


After 14 months of operations the firm has an inventory of nearly

200 cellular phones using Bell Atlantic Mobile coverage. After


charges (UPS overnight for $11, or second-day delivery for $8) the

cost is $4 or $5 per day, $26 per week, plus the cost of air time

— 95 cents for each minute, either incoming or outgoing, or $1.95

for international calls.

NOWfone’s marketing plan includes direct mail, the Internet, and of

course the "free" air time on Nassau Broadcasting’s radio

stations. Anthony Mecca, director of operations, is working on


agreements with hotels, limousine services, and airlines. Mecca


in marketing at St. Peter’s College in Jersey City, Class of 1977,

worked in the family catering business, and as production manager

for an engineering company. "We have the most success with the

small independent business person, individuals who are traveling in

the country on business," says Mecca. "Also with travelers

coming from different parts of the country and find their roaming

agreements don’t work in the east."

The "one-fee" charge is very popular. It’s the same whether

you call Paris or Sri Lanka, New York or North Dakota. The fee is

much higher than that offered by carriers such as AT&T, but AT&T does

not offer short-term rentals. Other competitors include car rental

companies, but not every overseas traveler rents a car.

"No service that we are aware of targets several million users

coming to our airports," says Mercatanti. "Since New Jersey

is the pharmaceutical capital of the United States, and Wall Street

the financial capital, the sheer number of business travelers measures

in the tens of thousands." He estimates there are 3 million


from target companies, and just 10 percent penetration would bring

300,000 potential users a year, 6,000 individual users per week.


have the opportunity to capture a market, but it is very


says Mercatanti. "And we have taken a huge leap of faith that

we can offer one price and still make money."

Mercatanti’s plans don’t stop there. He wants to go into the reselling

of land-based local and long distance phones, to be a CLEC


local exchange carrier). He would package that with Internet access

and cell phones for a four-way wallop. For the Internet offerings,

he is partnering with Arthur Zysk, founder of the nine-year-old


service provider named New Jersey Internet. Zysk has moved his


office from North Jersey to within the Nassau Broadcasting compound.

Mercatanti is impressed at the level of service that New Jersey


offers. In return, Zysk is delighted with the marketing wallop that

WPST offers. "He has gathered 5,000 subscribers, and we are


with a company that has three times that," says Mercatanti.


could find ourselves with 20,000 subscribers very quickly. And Nassau

Broadcasting covers an area with 3 million people that are most


to be online. We find that 60 percent of our listenership is


The four-way package will be advertised over the radio stations.


radio station covers 1 million people a week. We think we can


them by advertising directly to them," says Mercatanti. "We

will go after the consumer business, and we would be very happy in

New Jersey to have two percent of penetration, get 100,000 phone


and offer a high level of service."

Other services under the NOWfone name might include offering cell

phones for use by traveling Americans overseas.

About that airplane scenario: NOWfone has several options for


but it is not yet ready to get the phones brought to the airline


seat, as described above. But the company is negotiating with several

airlines on this matter. In the meantime, the traveler can pick up

the phone at his or her hotel or business address in the U.S. Soon,

says Martin, "we will be able to deliver the phones, for use here,

to an address in Europe."

"I am making a new beginning in an industry that has a lot of

potential," says Martin, "and I hope I can do even better

than I did in the pharmaceutical industry. It is like training for

the Olympics, you go for the gold."

NOWfone Inc., 221 Witherspoon Street, Princeton

08542. Peter Martin, president. 609-683-8222; fax, 609-683-0604. Home


For the article on AnswerNet, also on the cover, go to

Next Story

Corrections or additions?

This page is published by

— the web site for U.S. 1 Newspaper in Princeton, New Jersey.

Facebook Comments