Purchasing power: acquisitions mogul Tom Gores, who is eyeing Global Crossing, finds value in tech market. (People).

TOM Gores Cut his teeth in the mid-1980s--eons ago in computer years--selling business software through a Michigan company run by his older brother, Alec. There, Gores said, he learned firsthand the importance of maintaining relationships with customers and understanding their needs. Alec Gores sold the company, and later the brothers became partners in a new venture, looking for technology companies to buy. In 1995, Tom Gores broke away from his brother to form Platinum Equity, headquartered in Century City.

Since then, Platinum Equity has done 39 acquisitions, representing nearly $5 billion in annual revenues, most of it concentrated in the telecom and technology markets, while managing to avoid the excesses of the dot-com boom. His key business unit, NextiraOne, is a voice and data services operation formed from five of those acquisitions, two of more than $1 billion. No buyout firm did more acquisitions last year than Platinum.

Recently, Gores has been in the news as a contender to purchase Global Crossing Ltd. in a bankruptcy auction. In that deal, Gores will square off against brother Alec, whose Gores Technology Partners is also in the game.

Question: What kind of company does Platinum Equity buy?

Answer: It's got to have a service or technology customers depend on every day to run their businesses. You want to have predictability in your business to know that your big customers are going to be using it.

Q: Are they always in distress?

A: Bankruptcies are more common now, but typically for us it's been a parent company selling off a non-strategic division. Our profile company isn't always a mess. It was under-managed, had not reached its potential. Thirty percent of the companies we've bought were profitable before we bought them.

Q: What's the difference between the telecom companies you've bought and the ones whose stock market values have plummeted?

A: If you look at the Nortels of the world, and a lot of the people that are struggling, a lot of them are in the box-making business. They're making hardware. Our businesses really are more service oriented. Our businesses own the customer, which is really your biggest asset.

Q: A lot of the companies in trouble are the ones you've been buying assets from. What are they doing wrong?