Ecoark find­ing tal­ent it needs

2 ex­ecs re­shap­ing hold­ing com­pany

Northwest Arkansas Democrat-Gazette - - BUSINESS & FARM - ROB­BIE NEISWANGER

It didn’t take long for Jay Puchir and Charles Rateliff to re­al­ize they had a sim­i­lar vi­sion for Rogers-based Ecoark Hold­ings Inc.

Puchir, the new chief ex­ec­u­tive of­fi­cer, be­gan lay­ing out his plans and needed a chief fi­nan­cial of­fi­cer. Rateliff, who was re­tired af­ter a 25-year ca­reer at Wal-Mart Stores Inc., was a mem­ber of Ecoark’s board of di­rec­tors but be­gan con­sid­er­ing a re­turn to full-time work.

“Charles said, ‘I think I might like to do this if we were go­ing to go to­ward the Berk­shire [Hath­away] model,’” Puchir said, re­fer­ring to War­ren Buf­fett’s hold­ing com­pany. “I picked up my 90-day plan and showed it to him, and it said ‘Berk­shire model’ right on there. That was when the light bulb went off.”

They de­cided to team up and over the past three months have been re­shap­ing the com­pany, which was founded by Randy May in 2011. May stepped down as chief ex­ec­u­tive of­fi­cer ear­lier this year, and Puchir, who joined the com­pany as di­rec­tor of fi­nance in De­cem­ber 2016, moved into the role. May re­mains board chair­man.

Ecoark’s mis­sion, ac­cord­ing to Puchir, is to al­lo­cate cap­i­tal for ac­qui­si­tions and fund its ex­ist­ing busi­nesses that have the great­est op­por­tu­nity to pro­duce longterm value for share­hold­ers. He de­scribed the over­all strat­egy as a “mod­i­fied Berk­shire model,” adopt­ing a de­cen­tral­ized ap­proach to man­ag­ing com­pa­nies and be­ing open to an ar­ray of tar­gets.

One key step has been the devel­op­ment of a merger and ac­qui­si­tion team within Ecoark to iden­tify and eval­u­ate po­ten­tial busi­nesses to bring into the fold.

“What we don’t want to do is ex­clude any po­ten­tial pos­si­bil­i­ties of what might be a good re­turn for share­hold­ers,” Rateliff said. “So we want to be ac­tive.”

Cur­rently, Ecoark has a port­fo­lio of busi­nesses that pro­vide tech­nol­ogy and ser­vices de­signed to make com­pa­nies more sus­tain­able with­out com­pro­mis­ing prof­itabil­ity.

Zest Labs, based in San Jose, Calif., has gen­er­ated the most en­thu­si­asm and is Ecoark’s core sub­sidiary. The com­pany’s tech­nol­ogy tracks per­ish­able foods with real-time an­a­lyt­ics and is able to route those items through the sup­ply chain to main­tain as much fresh­ness as pos­si­ble. The tech­nol­ogy is de­signed to help elim­i­nate food waste and has plenty of mar­ket po­ten­tial, ac­cord­ing to Rateliff.

Ecoark re­cently pur­chased 440Labs, the soft­ware devel­op­ment arm for Zest, and sold a com­pany called Eco3D for about $4.8 mil­lion. The firm’s other sub­sidiaries are Pi­o­neer Prod­ucts, Sable Poly­mer So­lu­tions and Mag­no­lia So­lar.

“We’re not go­ing to be stand­ing over their shoul­der,” Puchir said. “But we’re also go­ing to be here to

pro­vide them guid­ance and cap­i­tal and check in on their bud­get once a month.”

Over the past four months, Ecoark has raised $18 mil­lion with two in­sti­tu­tional in­vestors, and Puchir said the com­pany has “well over” $10 mil­lion in cash on its books. He also added that the com­pany also has about $60 mil­lion of eq­uity it could put to­ward any po­ten­tial ac­qui­si­tions.

Ecoark com­pleted its ini­tial public of­fer­ing last year, and shares of com­pany stock are trad­ing on the over-the­counter mar­ket. Ecoark has com­pleted its ap­pli­ca­tion for up­list­ing to the Nas­daq and is await­ing ap­proval from the U.S. Se­cu­ri­ties and Ex­change Com­mis­sion.

“It would open up a whole new realm of in­vestors that can in­vest in the fund,” Puchir said.

The com­pany con­tin­ues to fill out its team. Last week, Ecoark hired Stephen Da­cus as the com­pany’s gen­eral coun­sel and his ad­di­tion will help Ecoark “ef­fi­ciently man­age the deal struc­tur­ing and vet­ting process for mul­ti­ple ac­qui­si­tion tar­gets si­mul­ta­ne­ously,” ac­cord­ing to Puchir.

His ad­di­tion comes af­ter the com­pany added for­mer Wal-Mart chief hu­man re­source of­fi­cer Su­san Cham­bers and for­mer Dil­lard’s con­troller Steven Nel­son to its eight-mem­ber board in April.

The ad­di­tions have been no­ticed. Clete Brewer, man­ag­ing part­ner of Ben­tonville’s New Road Cap­i­tal Part­ners, said he paid at­ten­tion when Rateliff came out of re­tire­ment to be­come CFO.

“The more cap­i­tal avail­able in a mar­ket to both ac­quire and in­vest in growth com­pa­nies is bet­ter for ev­ery­one,” Brewer said. “A ris­ing tide lifts all boats. So we wel­come that here and love to see more of it. I think it’s all pos­i­tive for the area, the ecosys­tem.”

While most of the com­pany’s cur­rent sub­sidiaries aren’t based in North­west Arkansas, Puchir and Rateliff ac­knowl­edged the pos­si­bil­i­ties in a re­gion that has pro­duced For­tune 500 com­pa­nies like Wal-Mart, Tyson Foods and J.B. Hunt. They be­lieve there’s po­ten­tial to help foster more suc­cess­ful busi­nesses as well, which is why they’ve teamed up to lead Ecoark.

“I left a very strong ca­reer and ca­reer path,” said Puchir, who was pre­vi­ously in a CFO devel­op­ment pro­gram with HCA Hold­ings. “Charles came out of re­tire­ment af­ter a long, sto­ried ca­reer as well. The op­por­tu­nity to work to­gether, the op­por­tu­nity to work with the com­pany and the op­por­tu­nity in North­west Arkansas is just too great to pass up.”

NWA Demo­crat-Gazette/JA­SON IVESTER

Ecoark Hold­ings CEO Jay Puchir (left) and Charles Rateliff, chief fi­nan­cial of­fi­cer, have been work­ing to re­shape a Rogers hold­ing com­pany.

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