Mowa Haile is the President of Sky Blue Builders and CEO of Apex Underground, two companies that recently converted to employee ownership through an Employee Stock Ownership Plan (ESOP). Part of what makes these companies unique is that their conversions to employee ownership are also part of efforts to address the racial wealth gap. Mowa will be a speaker at the Employee Ownership Ideas Forum hosted by the Economic Opportunities Program and the Institute for the Study of Employee Ownership and Profit Sharing at Rutgers University on April 9th and 10th in DC and online.
In anticipation of the event, Haile answered a few questions about the companies he helps lead and the value and benefits he sees in employee ownership.
Tell us a bit about yourself, your background, and the businesses you’re involved with.
I am an immigrant from Eritrea and came with my parents in 1981. I grew up in Fort Collins, Colorado and attended Colorado State University. After college, I worked in the tech sector for 13 years before starting Sky Blue Builders in 2009. I am married to an amazing lady, and we have two great boys.
I founded Sky Blue Builders, a general contractor in Colorado, and we currently have 42 employee owners. I also became the CEO of Apex Plumbing in January 2023.
How did you come to be interested in employee ownership?
I was fortunate enough to get stock options at the tech companies I worked at, so I saw the impact ownership can have on employees. Receiving ownership shares not only builds employees’ wealth but also their commitment to the company. When I started Sky Blue Builders, I had hoped at some point I would be able to put in place employee ownership. In 2021, I decided it was time to start transitioning some of my ownership to a few key people. I sold 10% of my ownership stake in January of 2022, with a five-year plan to sell most of my ownership to the employees.
Then, in June 2022, I read an article in the Denver Post about Apex Plumbing transitioning to full employee ownership. What caught my attention was that the transition was led by the social impact private equity firm Apis & Heritage Capital Partners (A&H), which is using employee ownership to advance racial equity. Wow! The idea of closing the racial wealth gap through employee ownership really attracted and spoke to me. I reached out to A&H through the contact form on their website. We met a few weeks later and learned more about their mission, and I was hooked!
Tell us about Apex Plumbing, what it was like to come into a company that had just recently become employee-owned, and your approach when helping it use employee ownership to reach its potential.
Coming in as a new CEO, you need to get an early win. Apex had transitioned to an ESOP less than six months before I joined, so there had been a change in ownership, in addition to a new CEO. I had a 120-day game plan, with the first 60 days being learning and listening meetings with office and field leadership. I emphasized at each of the one-on-one meetings that employees are the owners, and that managers communicate to their teams the value of ownership. I also held a company-wide meeting to introduce myself and express my excitement for all of them to be owners of a great company.
We had incremental wins over the first couple of months, and, three months in, we landed the Denver Water lead replacement contract for $25 million over three years. These wins were the result of a combined effort by many people across multiple departments. I believe they were invigorated by the transition to ESOP and the brighter future that the long-term Denver Water contract would bring.
How have you seen Apex Plumbing benefit competitively from employee ownership, and what has ownership meant for the workers so far?
Apex had previously pursued the Denver Water contract twice and lost both times. The third time, we won it. It was the same contract, so what had changed? I believe one change was the ownership mentality. The team worked together to put in a great proposal with the right pricing. It meant more to them because it was their company. It was great to win, but this is a huge contract that required an additional 25 people–a very tough hurdle with the shortage in labor. Our HR manager did an amazing job in hiring new employees, and the team trained all them one month in advance of starting the project. I believe the differentiator in our hiring process–besides having an amazing HR Manager–is being able to tell potential candidates that they will have ownership in the company.
Now, we must execute for Denver Water. Though we stumbled out of the blocks, we have become Denver Water’s top performing contractor. All of this happened in 2023, while we grew our revenue by 80%. This wouldn’t have happened without the dedicated employee-owners of Apex.
Now you are looking to convert the company you founded, Sky Blue Builders, to employee ownership. What was the motivation for that and what are your hopes for that company as you sell it to your workers?
We converted Sky Blue Builders to an ESOP on March 15, 2024! What I had hoped to do when I started the company came true. My business partner Lauren Grosh and I couldn’t be any happier.
We were approached in early 2023 to sell the company to a larger, private general contractor. As an entrepreneur, being able to sell your company means a lot. After 15 plus years of hard work and reinvestment in the company for long term success, being able to sell it means it was all worth it! But it never felt right for us to sell to an outside buyer. We have employees on our team who have been with us for eight or more years, and we didn’t know what would happen to them in the long term. So, we were more than excited when Apis & Heritage stepped in to help us convert Sky Blue to an ESOP. That felt right!
We are excited for our team and what the future holds. Sky Blue has almost three years’ worth of awarded contracts and was built with the right systems, process, and right team for long term success. Lauren and I couldn’t have written a better script than selling it to our team.
Colorado, where you are based, is one of the leading states in supporting employee ownership. What do you think other states can learn from Colorado and how it supports ownership?
Colorado, with the support of Governor Polis, is a great example for other states when it comes to employee ownership. As we started the transaction with Apis & Heritage, we learned a few things that the state provides for ESOP transactions. First, it provides a tax credit of up to $150,000 for the seller’s transaction costs. This is huge, as a transaction to employee ownership can sometimes cost sellers hundreds of thousands of dollars. Second, the state provides support to reduce risk for banks that provide a loan for the purchase price. In this case, A&H teamed with Vectra Bank to provide the senior term loan. With ESOP transactions, a company might not have enough collateral to support the loan or a line of credit. In our case, we were very close, but with the state’s collateral protection, the state was able to provide funds as additional collateral to support the loan. Colorado’s Office of Economic Development and the Colorado Employee Ownership Office continue to lead and innovate to support employee ownership.
Mowa Haile
President, Sky Blue Builders
CEO, Apex Underground
Mowa Haile is president of Sky Blue Builders, which he founded in 2007 after a tenured career in the technology sector. As of 2020, Sky Blue was the Denver Business Journal’s fourth- largest minority-owned business. He is also the CEO of Apex Underground, a company that was converted to an ESOP in 2022. Mowa is also managing member of Sky Blue Properties, Lucina Eatery & Bar, and a member of Sky Blue Concessions. Mowa has 28 years of corporate development, operations, and management experience. Before Sky Blue, Mowa worked in various management roles with Level 3 Communications and Inflow. Mowa was selected as the Minority Business Person of the Year in 2012 and CEO of the Year finalist in 2015 by Colorado Biz Magazine.
