February 18, 2013
2013 Small Business Leader Of The Year
Phil Adams Leads World Energy Out Of Its Startup Phase
PHOTO/Matt VOLPINI
Philip V. Adams, CEO, World Energy Solutions, Worcester
Those who know World Energy Solutions say Phil Adams' elevation last summer from president to CEO marked a turning point for the company. He stepped in for founder Richard Domaleski who, calling himself "an entrepreneur at heart," said it was time to pursue new opportunities.
Investors and analysts alike recognize that entrepreneurial spirit as a difference between the two men.
In a report issued last month, Michael Legg, senior research analyst with Roth Capital, said Adams' appointment as CEO "marks a move to a more corporate growth strategy."
Legg said that's a common move for growing companies like World Energy, which Adams helped take public in 2006, a year before he became president.
"I think it's very common for an entrepreneur to found a business, to see it through its early stages and to turn it over to a more corporate professional to take it through its next level as it grows," he said. "It's not a startup anymore. It's a real company with real revenue."
The company, founded in 1999, struggled through the recession but turned a corner last year, posting a profit for the first time and going on to have four consecutive quarters of record-breaking revenue.
Growth By 'Turbocharging'
A big part of the jump in revenue and profit can be credited to the company's four acquisitions it executed within 18 months. Adams said the board of directors met a few years ago and toyed with the idea of going private because it would cost World Energy less. The other option, he said, was to "turbocharge growth."
The board chose the latter, and in April 2011, sold stock to raise capital to make acquisitions.
"Once you get on that trajectory, then you get pretty interesting to Wall Street," Adams said.
In September 2011, World Energy acquired Co-eXprise, a Pennsylvania software firm specializing in energy procurement, for $4 million.
A month later, it bought Northeast Energy Solutions (NES), a Cromwell, Conn.-based energy efficiency management firm, for $4.75 million. That deal allowed World Energy to move into the energy-efficiency business, helping customers decide on things like upgrades to lighting, heating and cooling systems.
Then in November, it purchased the energy procurement division of GSE Consulting, a Texas-based company that gave World Energy the opportunity to move into the mid-level market, for $8.6 million.
"We both moved into faster-growing segments in the market and to new product areas that are complementary to what we do," Adams said of the acquisitions.
Those three would be followed by another purchase in October 2012, Northeast Energy Partners LLC for $7.9 million. That allowed World Energy to offer procurement services in areas where it had gained energy efficiency customers through the NES acquisition.
Jack Robinson, a partner at Brown Advisory in Boston, a long-time investor in World Energy, said the acquisitions were somewhat of a surprise.
"That was a lot for them to absorb, but they did it," he said. "They were opportunistic."
Adams said those were calculated moves to give customers one-stop shopping with World Energy in an industry that's otherwise very fragmented.
The company that started by offering competitive energy prices through online auction near the start of deregulation, which happened in 1996, has gone on to offer services that include bill management, energy efficiency and demand response, which allows companies to reduce energy usage during high-demand times or when prices are higher.
Adams said 2012 was about assessing what World Energy had acquired in the past year and making sure transitions went well. This year he plans to boost company efforts to cross-promote its services.
"Now it's like, this is on me and I've got 125 families depending on this thing going well."
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Editor's note: An earlier version of this story had an incorrect last name for Jack Robinson. Also, the year of World Energy's first quarterly profit has been updated to reflect the company's restatement of its earnings for the fourth quarter of 2011 through the third quarter of 2012.
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Business Leaders of the Year 2013 - Philip V. Adams, World Energy Solutions
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