Merger and Outside Investors Revitalize Company
Arxx Building Products, a longtime leader in the insulating concrete forms industry, has merged with Apex Construction Systems, a maker of cement-EPS composite ICFs. The combined company, which retains the Arxx name, aims to broaden its products beyond the distinctive exposed-tie ICF and offer designers, distributors, and contractors a comprehensive range of green building products for the exterior building element.
“We want to move away from being just an ICF company,” says Gloria Tuck, Arxx marketing director. “We’re now a green envelope solutions provider. In other words, we want to provide everything you need to build a better, green building envelope.”
That’s a radical departure for Arxx, founded in the late 1980s and led for many years by industry legend Ritchie Scott. Then called AAB Bluemaxx, the company was the undisputed leader in flat-wall ICFs for nearly a decade, dominating that market segment until it underwent a major restructuring in 1998. In the aftermath, a host of competing systems have sprung up.
In mid- to late-2006 the board of directors brought in several new executives, including CEO Frank O’Dea and Robert Coveney, to chart a new direction.
Robert Coveney, vice-president of sales and marketing, explains. “We had been developing our strategy over the last year, and realized that green building was picking up some mainstream momentum. In the last 18 months or so, it became obvious that it will create a sustained, long-term change in residential and commercial construction.”
Frank O’Dea and his team put together a long-term plan to capitalize on the movement, and presented it to the board of directors last summer. “The board liked the direction, but not the financial requirements needed to carry it out,” says Coveney. So he and O’Dea began looking for investors.
They found a good match with DFJ Element Partners, a venture capital firm that invests in eco-friendly products and services—or as their website puts it, “clean technology solutions to global resource and environmental constraints.”
Element Partners was familiar with insulated concrete forms—they provided much of the start-up capital for Apex Block, a composite ICF—and saw advantages to adding Arxx to their portfolio.
“Apex was just getting up and going,” explains Coveney. “They had the technology but not the infrastructure. Arxx had infrastructure and an outstanding distribution base. We saw some great synergies there.”
The deal was finalized on Dec. 15, 2007, and promoted for the first time at World of Concrete the following month in Las Vegas. Their booth featured a redesigned, green logo and the tagline “arxx elements,” accompanied by a stylized, multicolored molecule emblem.
“Arxx elements captures the essence of what we’re really about,” explains Tuck. “Each of the different points of the element logo represents a different product solution we provide for the green building envelope.” Currently, those elements include Arxx ICF, Apex Block, waterproofing, accessories, scaffolding, and alignment systems.
“We’ll add to the mix to meet the needs of the green building community,” she says, “but it has to be complementary with our strategy.”
“Basically, we’ve aligned the company to be a better participant in the envelope solution,” says Coveney.
Coveney claims that despite the apparent competition with two different blocks, distributors are happy with the changes. “We’ve been extremely pleased with the reaction in the marketplace, and from our distributors,” Coveney says. “Obviously, there were some initial concerns and jitters, but once we explained where we were going, the distributors didn’t see it as a negative. What they saw was that we’re driving distributor sales forward.”
Apex has gained impressive infrastructure, including a marketing department, tech support, and R-and-D. Potentially, it could be sold by the more than 400 distributors Arxx has in place.
For now though, there are no plans to blend the two products. “In the short term, Arxx will be Arxx and Apex, Apex,” says Coveney. “Gray block certainly has its advantages, but for our initial penetration of Apex, we’ll focus on the southwest market, where grey block has proven to be most popular.”
In mid-February, the company received another massive influx of investment capital, totaling $16 million. Once again, the investors were “clean technology venture capital firms,” Nth Power and Emerald Technology Ventures.
The funding will help the company expand in the commercial sector, where sales lag behind the industry average. “Part of the overall strategy is to set up a stand-alone commercial division and position ourselves as a broader construction products company,” says Coveney.
The new investors have seats on the board of directors, but day-to-day management will remain with Frank O’Dea, current CEO. Jim Miller, former CEO of Apex, is VP of Operations.
“This is the most exciting time in all of Arxx history,” says Coveney. “We’re the only supplier financially supported the way we are, and in a position to capture the green building movement going mainstream. We are ready to aggressively market our solutions in North America and worldwide.”