OVERLINE: RESIDENTIAL HVAC/by Terry McIver, editor-in-chief
In our December 2023 issue, we shared Part 1 of a look at an advanced technology for remote heating and air conditioning diagnostics: HomeX Intelligent Diagnostics, powered by ChatGPT and artificial intelligence. HomeX is the invention of the very successful home services entrepreneur and executive Michael Werner, who is establishing an improved technology-enabled service business network through acquisitions, followed by incorporation of HomeX technology into those acquired businesses. HomeX is also being implemented more broadly by HVAC, plumbing, electrical, appliance and garage door companies. Any business is welcome to incorporate the HomeX technology.
The December article shared the story behind the birth of HomeX, and how Michael Werner went about his mission to provide improved technology to HVAC technicians and a better home service experience for customers.
At this point in time, HomeX has acquired GEM Plumbing & Heating, Lincoln, RI; Haller Enterprizes, Lititz,PA; Universe Home Services, Seaford, NY; and the newest acquisition in December 2023, Weltman Home Services, Berkeley Heights, NJ.
For this article, we spoke with Brian Alexson, President of HomeX, to learn more about the HomeX acquisition strategy.
While attending college, Brian Alexson started a successful janitorial business that was employing 27 people by the time he graduated. He sold that business to ServiceMaster, and stayed with them for 16 years, in various senior leadership roles with Terminex and TruGreen Lawn Care. That was followed by a position as CEO of a southwest HVAC/plumbing/electrical business and CEO of the global pest control company Anticimex. A chance conversation with Michael Werner led to Alexson joining the HomeX team.
Contracting Business: Brian, what does HomeX look for when seeking to acquire a business?
Brian Alexson: It always boils down to, how good are the people? We are very focused on tech-enabling our businesses, and how we can utilize more technology, but servicing and taking care of customers comes down to people: how good we are in the field, and has the current ownership built a culture of providing an outstanding customer experience? It’s unfortunate, but in today's economy, we've become very accustomed to mediocrity, and when it comes to the consumer experience, we want to change that. Fortunately, the GEM, Haller, Victory,Universe and Weltman brands have had none of the service-related issues that usually need to be addressed.
CB: That’s because you’re doing your homework. HomeX is, however, making some changes related to centralization of each business’s internal processes. Describe that.
BA: Yes, centralization of business processes has been ongoing within the acquired companies. We’ve centralized finance and call centers, and we’re centralizing procurement and marketing, taking all of the day-to-day duties off of them and building a center of excellence in each of those areas to support them, so they can focus on building an outstanding customer experience. That's our organic growth strategy.
CB: How is the HomeX business plan progressing after 18 months?
BA: We've had a very good 2023. We're going to grow it organically in the high 20 percentile. Margins are improving, much of which is just from improved operating efficiencies. In 2024, we're looking at being close to 30 percent growth year-over-year organically, and then obviously acquiring and merging with some companies during 2024.
Jeff Gemma, vice president of procurement is doing a phenomenal job. He has helped us to utilize our size to build purchasing strategies and efficiencies that these smaller acquired businesses would not have had prior to partnering with us. He and his team are negotiating deals on behalf of all our businesses. They’re able to negotiate on a much larger scale than each individual business.
Our outstanding finance team, headed up by our CFO Zach Rips is building out a financial planning and analysis method to help them project out and build better plans and strategies. They look five miles down the road so we can make adjustments prior to hitting any curves. At the close of business each month, a centralized financial team is better equipped to provide better transparency in terms of where we’re doing well, and where we need to make some tweaks on a day-to-day basis, whether it’s to increase our marketing spend in a specific market or shift some staff to handle our backlog faster. All those types of things help you be nimbler during the course of business.
CB: What types of benefits and career paths have opened up for employees in the acquired businesses?
BA: Our centralized procurement opportunities and human resources processes have helped us build better benefit packages, 401(k) options, the things that create a better quality of life for employees that they might not have been able to have at some of the smaller businesses, or family-owned businesses, because they’ve taken it as far as they can and just don’t have that capability. My goal is to double and then triple the size of this business over the next 40 years, which will create a lot of opportunities that don’t exist today.
As far as leadership opportunities are concerned, Jennifer D’Ambra, our head of operations, came from the GEM business. Kenny Roger, platform president for our Haller business is president there and running the business aswell. And there are probably about 30 more opportunities we’ve created career paths for, and significant promotions that wouldn’t have been available to them otherwise. That’s the exciting part, to be able to create opportunities and career paths.
CB: In which regions of the country will HomeX be concentrating its acquisition activities?
BA: We don't have a lot of interest in moving outside of the northeast portion of the country. There are great opportunities from New Jersey or even the Mid-Atlantic states moving North. I think we've got plenty of opportunity within that market. We currently operate in all of the New England states, New York, Connecticut,
New Jersey, Pennsylvania, Rhode Island, so extending beyond will not be necessary for us to grow to the desired level. The key thing for me is that it's not necessarily about being the biggest business out there. It's being the best and delivering great career paths for our people, taking good care of our employees while we take good care of our customers and build an outstanding customer experience.
CB: Since the time that I interviewed Michael Werner, HomeX has acquired Weltman Home Services in Berkeley Heights, NJ. Tell us about the company.
BA: Weltman Home Services is a phenomenal business. Their owner, Dan Weltman was one of the founding members of Nexstar (a leading business building group). Dan is one of the most likable guys you’ll ever meet, and he’s built one heck of a business. So we’re really please that his business has been our launch into the New Jersey market. Beyond that, I can only say we have roughly 30 businesses that we’re in conversations with.
CB: Are there any closing remarks you’d like to share?
BA: I’d like the market to know, that if anybody is contemplating selling their business, Michael has said we take a family approach to family businesses, because this all started as a family business. The Werner family started this, and obviously we've grown and will continue to grow. But we never want to display the arrogance of ownership. We want to remain very employee friendly.
In February: HomeX technology in action.