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In business energy local entrepreneurs hope to strike big with clean energy By Eli Segall staff writer Working from a sparsely decorated office suite in a nondescript building in Henderson, Johnny Thomas and John Francis are trying to build a clean-tech empire. They're well on their way. The men have acquired two subsidiary firms for more than $17 million combined and locked up several project deals. It's far from their first crack at building a business: The veteran entrepreneurs previously grew a seed company into a billion-dollar enterprise. Through their current company, Blue Earth, Thomas and Francis have acquired firms that retrofit heating, ventilation and air-conditioning systems, snapped up clean-energy projects and contracts, and teamed with a Greek company to land even more. If all goes well, they could grab a big slice of a lucrative and growing cleantech industry. In North America, revenue from energy retrofits to commercial and public buildings is expected to more than double by 2020, to $35 billion, according to Pike Research. steve marcus green execs: Blue Earth's John C. Francis, left, and Johnny R. Thomas have known each other for 30 years and led other companies together. The rural New Mexico natives are not energy specialists by trade, and they're not looking to develop their own products or services. Rather, they run a holding company similar to Warren Buffett's Berkshire Hathaway. They acquire businesses, finance their expansion and hope for profits. Blue Earth said it expects to earn about $11 million in revenue in 2012 and $100 million in 2013. It did not predict potential profits or losses. In 2011, the pair's first full year at the helm, the company lost $14 million on $5.3 million in rev- enue. They joined Blue Earth in September 2010, with Thomas as president and CEO and Francis as vice president of corporate development and investor relations. They chose to focus on energy efficiency and acquire companies and technologies in that sector. They found a number of small contractors that offered heating, ventilation, airconditioning or refrigeration upgrades, but none provided all of those services together. They also came across business owners who wanted to sell their companies and retire, but Thomas and Francis weren't interested. "We need their expertise; we need their licenses, their passion," said the 71-yearold Thomas, who grew up in a farming family and has a master's and Ph.D. in genetics. In January 2011, he and the now 63-year-old Francis — who hails from a family of cattle ranchers and New Mexico politicians — closed a deal to buy Castrovilla, which performs energy audits and commercial refrigeration retrofits. It earned about $3.5 million revenue in 2010, more than double from 2008, and saved customers tens of millions of dollars in utility costs, according to Blue Earth. Expansion plans for the new subsidiary soon followed. Blue Earth announced in May 2011 that Castrovilla would seek customers in Nevada, Utah, Arizona, Southern California, Oregon, Idaho and Washington. Blue Earth then acquired Xnergy, a company that designs, builds and maintains energy-savings projects. Through Xnergy, Blue Earth signed an agreement with Biosar Energy to pursue large-scale solar projects. Biosar is a subsidiary of Ellaktor, a Greek holding company with real estate, waste-management, energy and mining operations. Despite the progress, Blue Earth's headquarters leaves the impression that it's a tiny company. Thomas and Francis work in a 2,500-square-foot suite on Horizon Ridge Parkway decorated with paintings by Thomas' wife, Helen, and the only other person who works with them is corporate administrator Edith Vasquez. You may not see us, but your mining industry is with you. Every day. Using environment-conscious methods we: • Createmorethan60,000 high-paying jobs • Pay $300 million in state and local taxes • Supplythemineralsthathelpcreatethe products you depend upon Learn more at NevadaMining.org | 7 JANUARY 2013 20130107_VI13_F.indd 13 | And most importantly, we're proud to be a major source of financial support for Nevada's children, families and education. 13 1/3/13 2:07:45 PM