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 marker 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 Covney, 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 provide 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.”

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, 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 Arrx 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.”

Credit: ICF Builder Magaizine April/May 2008

Long Beach, California, May 1, 2008 — In response to increasing demand for more durable, energy-efficient building systems, Conduit Development, a Long Beach-based sustainable green builder, supplier and developer, is proud to have joined forces with ARXX Building Products Inc., the leading supplier of Green Build Systems in North America.

“We are pleased to bring the ARXX Green Build System, including the company’s superior Insulating Concrete Form (ICF) Wall System, to the building community and homeowners throughout Los Angeles, Ventura and Santa Barbara counties,” says Denise Gonzales, CEO of Conduit Development. “With its environmentally forward vision, ARXX represents the future of sustainable building and is in line with our business objectives. The company’s comprehensive suite of green products is designed to create more energy-efficient, stronger and safer homes and businesses that will last for generations to come.”

“ARXX has the highest regard for the reputation and customer service that Conduit Development has exhibited in their growing green building solutions services,” says Randy Daniels, Southwest Regional sales manager for ARXX. “We feel Conduit can offer ARXX ICF customers world-class support.”

By becoming a major California distributor for ARXX, Conduit expands its role as a pioneer in eco-friendly building techniques and practices. Most recently, Conduit partnered with Habitat for Humanity of Greater Los Angeles to construct 14 Gold LEED-certified homes for the high-profile Jimmy Carter Work Project 2007.

Heading up the ARXX eco-friendly product line is the ICF Wall System, which is comprised of “stay in place” expanded polystyrene forms that are reinforced with steel bars and filled with concrete. ICF is mold, weather and insect resistant, and provides superior green benefits.

The ARXX Green Advantage:

Significant savings on energy bills

The only ICF with a UL/ULC Fire Rating

Elimination of “cold spots” that occur in conventional frame homes

Interior temperature stabilization

High R-values

High thermal mass

Low air-infiltration

Sound Transmission Classification up to 50 or higher

Proven strength and security for added protection against tornadoes, hurricanes and other natural disasters

To further promote environmentally friendly building techniques, including the use of the ARXX Green Build System, Conduit will conduct a series of one-day ICF technical training seminars for forward-thinking industry professionals, including developers, architects, engineers and builders. The first seminar is scheduled for Friday, June 6, 2008 and will be held at the Energy Resource Center in Downey, CA in partnership with Forming Solutions, distributors for ARXX in Orange and San Diego counties.

To register or learn more, log on to www.conduitdevelopment.com/workshops. To learn more about ARXX Green Build System, log on to Arxxbuild.com.

About Conduit Development:
Based in Long Beach, Calif., Conduit Development is a full-service residential and commercial sustainable green builder, supplier and developer specializing in Insulated Concrete Form (ICF) construction. Under the leadership of COO Simon Gonzales, an industry veteran with more than 30 years of industry experience, and CEO Denise C. Gonzales, Conduit approaches every project with only the highest degree of professionalism, integrity and eye for quality. To-date, Conduit has constructed several private homes and businesses throughout Southern California. To learn more go to: ConduitDevelopment.com

LBHI-Cover

Originally uploaded by Conduit Development

Take a look at the latest press Conduit received.

We thank Long Beach Home Improvement for recognizing the importance of promoting Green Living. The publication dedicated an entire issue to helping area homeowners understand how beneficial, rewarding and easy sustainable green living can be. Here’s what LBHI had to say about Conduit . . .

Simon Says . . . Winter is here & rain is on the way. Conduit can assist you or your firm with your waterproofing needs. The photograph you see here is a picture of Santa Monica Bay Towers on Ocean Blvd. in Santa Monica, CA. (if you click on the photograph you will see a series of slides) Our crew waterproofed, sealed and finished all decks with a decorative epoxy coating. We completed the project in approximately 2 months, with the management company totally pleased with the outcome. Santa Monica Bay Towers and all their tenants are now prepared for the Winter showers. Let us know if with can help you.

Santa Monica Bay Towers

Originally uploaded by Conduit Development

Simon Says . . .

“We are shifting paradigms and changing the methods in which structures are built in North America, and ICF’s are the essential ingredient of this strategy.”

Insulating concrete forms as a growth market! What a concept. Just a decade ago, ICFs were known as a relatively obscure building system used mostly for foundations.

Insulating concrete forms as a growth market! What a concept. Just a decade ago, ICFs were known as a relatively obscure building system used mostly for foundations. Mainstream builders laughed at ICF forms saying, “There is no way that’ll hold concrete.” If you really want an education on how far ICFs have come, talk with seasoned veterans who installed ICFs 10 years ago and you will hear an earful about the challenges they faced each and every day on the job site.

Fast forward to 2003. ICFs are now the third most popular building system used in residential construction, and the fastest growing building material in the U.S. market. What about those challenges on the job site? Solutions have been created in the means of an easy to use, first-class building system that delivers a quality wall system. In short, ICFs have matured into a product that is catching the eye of customers, contractors and architects alike.

UNPARALLED GROWTH
According to the National Association of Home Builders, ICFs grew from less than 0.1 percent of the above-grade residential market in 1993 to 3.8 percent in 2002. That constitutes a 3,700 percent increase in ICFs’ residential market share, an increase in business typically reserved for the likes of Microsoft and General Electric.

The growth of ICFs in Canada is equally impressive. According to the Cement Association of Canada, 1,920 above-grade single-family ICF homes were built in 2003, up from 1,449 in 2002.

However, this growth isn’t a surprise to anyone. Rolland Johns, vice president of marketing at Cemex USA, says, “The ICF industry continues to grow and prosper because it is technologically superior. Like any new technology, the industry has been challenged in this early stage of the product life cycle; but the tenacity of the industry’s early pioneers, and the partnership that was forged with the cement industry have provided a firm foundation for a prosperous future.”

MARKETABLE BUILDING MATERIALS
Although ICFs are still used for foundations, markets have expanded to use in the above-grade single-family home market, as well as military base housing and multi-family residential projects. As first-cost building issues become less and less of a concern on projects, clients understand the long-term value and benefits of using ICFs.

Another important market in the growth of ICFs over the past few years has been the increase in the number of ICF subdivisions emerging around the United States. From South Carolina to Mississippi, and from Minnesota to California, ICF subdivisions have been gaining in popularity.

Jim Niehoff, residential promotion manager of the Portland Cement Association, says, “There has been a dramatic increase in the number of developers who are constructing small- and medium-size subdivisions that feature ICF walls exclusively.” Additionally, Niehoff said he believes there will be continued expansion throughout all levels of the housing market due to the benefits and payoffs that ICFs offer to homeowners, and that contractors are starting to take note of as well.

“The energy efficiency, disaster-resistance and sound mitigating qualities of ICFs strikes a chord with homeowners at every income level, and this directly affects its popularity as a building system. As a result, PCA projects that by 2006, ICF systems will make up 8 percent of all single-family housing starts in the United States.”

IMPROVED PRODUCTS
One of the most significant improvements that has spurred growth over the past several years is the creation and improvement of such mainstream building products as joist ledger board hangers, window and door systems, bracing systems, tools and waterproofing materials; items specifically designed to make building with ICFs easier.

Buddy Hughes of Insulated Concrete Inc., an experienced ICF contractor says, “It’s a great deal easier building with ICFs now with all the innovative products on the market, and it’s helping to increase productivity on the job site. With the development of coatings, structural attachments and architectural finishes, ICFs have become one of the most user-friendly building systems available.”

STRONG PARTNERSHIPS
Although ICFs remain a relatively simple building system to master, the need for qualified ICF installers increases every year, and as the industry grows, so does the demand for professional installers and quality workmanship.

Since 2001, the ICFA has worked with the United Brotherhood of Carpenters to train UBC apprentices and journeymen in the proper installation of the ICF building system. David Lawson, ICF training coordinator of the United Brotherhood of Carpenters says, “The United Brotherhood of Carpenters is impressed by the attention and reception the ICF building system receives from both customers and contractors. UBC members are excited about its potential, and look forward to providing the industry with credible and professional ICF installers.” Lawson is also confident about the ICF market, and said he believes ICF construction will become more competitive as more tradesmen become proficient in its installation.

Additionally, the ICFA also works with the National Association of Home Builders to educate its members about how they can receive the training necessary to begin building with ICFs. Through education seminars and presentations to their members, homebuilders throughout North America are realizing how they can be competitive using ICFs.

THE CUSTOMER
Although it can be said that product innovation and improvement has helped to fuel ICFs’ popularity, the industry has never forgotten what is mostly responsible for its rapid growth: customers.

The ICF story is an amazing mixture of customer loyalty and brand identity that surpasses the benefits of living in an energy-efficient, disaster-resistant structure. ICF homeowners boast about their comfort level, the love of their home, how much they save on their energy bill and how they would never live in any home except an ICF.

THE FUTURE
Considering the incredible growth ICFs have experienced over the past decade, ICFs’ future looks bright. Still, the ICF industry’s most important mission is one of education. Training, awareness and best practices remain top priorities of the industry to ensure ICFs are properly used in the design phase and on the job site.

The face of residential construction is changing, and ICFs are leading the way.

Credit: Concrete Homes Publication, Joseph Lyman