Crete United, a new entry on the Private 125, owns more than 40 commercial HVAC, electrical, plumbing, building automation and other companies that CEO Mike Cox says have a core mission of “making every building healthier.” Four of the companies are based in North Carolina.
Crete was cofounded by Frank Zhang and Jake Sloane, both Harvard MBAs who had worked on Wall Street. They previously co-founded Alliance Animal Health, a veterinary service company based in Stamford, Connecticut.
In 2022, Charlotte’s Ridgemont Equity Partners bought majority control of Crete and helped accelerate growth to more than
$1 billion in annual revenue and 4,000 workers. That same year, they also recruited Cox as CEO. He had most recently led Texas-based Bilfinger North America, which maintains offshore oil and gas projects.
Cox is an unconventional boss. The Charleston, South Carolina, native didn’t get adequate grades during his freshman year at the University of South Carolina. So he enlisted in the U.S. Navy, spending 16 years there, mostly as an underwater construction diver. It prepared him for a strong construction industry career.
He also earned an undergraduate degree from St. Leo’s University near Tampa, Florida, a master’s degree from Michigan State University and an MBA from The Citadel. This interview was edited for clarity.
You have an interesting military service history. How did that fit in your life?
I went to college, and I didn’t understand the importance of attendance, so I left. Actually they told me to leave. But I went to the Navy and got my head on straight, then went back to school. I learned a lot about accountability and leadership. I grew up in the military. I was mostly in a specialized unit and that molded my leadership style.
When I joined the military, I went to California to work on the USS Flint. I was on a ship for a year, then I went to the Navy diving program and then I spent 10 years on the underwater construction team. We did underwater construction and demolitions all over the world. Our 15-man squad was among only about 150 divers in the entire Navy.
We did just what it sounds like. We built cable. We blew things up on the water. We repaired things in both combat and non-combat situations. It was pretty interesting, a special forces or special operations-type role.
Did it help you get into the construction industry later?
I was trained as a construction electrician, but I can’t wire a light. That was one of the jobs they had, so I picked it and it sounded attractive to me.
I can’t do basic electrical work, but I can wire C4 (explosive), and I can walk on the bottom of the ocean, and do those kinds of things. I’ve had some close calls and I’ve been pretty deep, 300-feet plus. I think I’ve walked on the bottom of the ocean in every main body of water in the world. They’re not resort locations.
I look back sometimes and say, man, I don’t know how I’m here. There have been some hairy moments.
Did this experience aid your civilian career?
When I was in the Navy, I had a choice. I could go to door number one and go be a Navy SEAL. Or I could go to door number two and go to the underwater construction team. The training is very similar.
I had met a guy, who said, “If you become a SEAL, what are you going to do with that post career? But if you go to the underwater construction team, there are jobs to be had in the construction industry when you get out.” He was absolutely correct.
That’s how I got into this world, because I could easily transfer my knowledge.
Is Crete a classic rollup strategy?
I think it started that way for sure, absolutely. There are a lot of good businesses built that way. I would say two years ago, it was a classic rollup. Today, it’s much different.
I like to use the phrase, ‘We’re not a bag of marbles, we’re a bowling ball.’ There’s a big difference being that we’re fully integrated. These 42-plus companies share in a common strategy or common thread.
Have most of those 42 owners stuck around?
We want them to stay. I’m guessing here, but 90% are still running their company. The other 10% elected to retire or take a back seat. The owners are still running the company and we’re just guiding it.
Is it hard for those owners to give up some control, because they’ve been doing the same thing for many years?
It’s incredibly difficult, and we’re super sympathetic to it. They go from being owners to partners. They have to kind of work as a team, so we’re looking for special people with a right mindset.
We actually turn down more deals than we do because we are looking for the right mentality of a person or character that wants to come in and see the bigger picture and say, “I’ve taken my business as far as I can take it. With backing and support, I can break through and get to the next level.”
Are you buying successful companies or also turnarounds?
Most of them are growing and some are showing double-digit growth. We like successful businesses with really good leaders.
Are baby boomer owners retiring, creating M&A opportunities?
The reason a lot of people sell to us is because they don’t have a second generation or third generation to run the business. They also have a great commitment to their employees and want to see the business go forward and continue to scale, and they want to have a voice in how that happens. We give them that strong voice.
How do you make sure they have a continued voice?
Our deal structures are just unique, and kind of a secret weapon. We don’t mute their voice or minimize their involvement.
None of these are cookie-cutter. They’re all different, but we try to weave in what we call three strategic threads that we need to wind through every business, while maintaining their original identity. We love service-based businesses, we love cross-selling and we love working directly with owners, not through self-contracting. Those are three things that we can get traction behind.
How has Ridgemont’s ownership affected Crete?
You couldn’t ask for a better private equity sponsor. Instead of saying “We want you to be a traditional rollup,” they leaned into our strategy and said, “this is unique, the right strategy and we will back you.” That really says a lot because a lot of private equity people wouldn’t take that chance. It’s working out. How we’ve built Crete is largely because of teamwork with Ridgemont and their commitment to the state of North Carolina and Charlotte.
HVAC and energy efficiency companies are highly prized. Is that sustainable?
It’s very sustainable. Even with the new administration probably not doubling down on energy efficiencies, like the former administration, it’s still top of mind for a lot of companies. A lot of our larger customers really see the value of sustainability and how we want to connect the energy efficiency and operating systems of their buildings. If they get it, it’s a pretty direct correlation to better health and better environments for their employees, but also cost savings.
Are reduced subsidies because of Trump administration policies affecting business?
For some of the larger companies like Wells Fargo or Bank of America, it’s not such a big deal. Maybe for some smaller entities, they might have some reservations because some of the [subsidies] aren’t there any longer. But for the most part, most of our customers are doing it because it’s the right thing to do to reduce energy costs. They often can prolong the life of their buildings and save money at the same time. And if there are subsidies, great.
So energy efficiency remains critical?
There’s a lot of education that needs to happen for a lot of folks on energy efficiency. We all think about it in terms of emissions from cars. But buildings put off between 35% and 40% of greenhouse gas in your city today. So if you get all the buildings more efficient, you actually have a bigger impact than switching to electrical vehicles. It’s not hard, you just have to be deliberate.
Media reports earlier this year said that Ridgemont was considering selling Crete. Did that affect business?
I think this is the worst time to sell a business, especially in the first quarter this year, because of higher interest rates and other uncertainties. We know we have a really good business, and when the time is right, we’ll explore that option. But the time is just not right for us today. We’re well ahead of our schedule, and our strategies work. No one’s pressing to do it tomorrow.
What is the most fun part of your work?
As CEO, you know, you have to be a strategy person, and I love it. I let the team run the day-to-day of the business. I’m trying to be six months out in front, looking for the next opportunity, both from an M&A or your market expansion. And I like to spend time with our partners. This is a business of blue-collar people who have just built really good small companies.
If you just take your time, even if you are the CEO, there’s an education to be had. Absolutely every time I go, I learn something. We can build on that. Big companies can start getting too big for their britches. As long as we keep it humble and local, we’ll be in good shape.
Have you been pleased with having the company based in Charlotte?
I lived in Charlotte for nine years before I moved to Houston. The culture, the talent, the economy, it’s second to none. When we’ve recruited people to come to Charlotte, there have been no reservations. People want to move to Charlotte. It has a
great reputation. ■
David Mildenberg is editor of Business North Carolina. Reach him at dmildenberg@businessnc.com.