The transformation of one Arvada business into a 100% employee-owned enterprise was accomplished with the help of an investment fund that backs the conversion of companies with substantial workforces of color.

Apex Plumbing at 4420 W 58th Ave. has served the Denver area since 1985. Its labor force is made up of about 50 employees – around half of whom are Latino.

As of early June, its employees took over ownership, with social impact private equity firm Apis & Heritage Capital Partners leading the transition. “Closing the racial wealth gap is why we created A&H,” said Phil Reeves, founding partner, in a statement.

Since 1970, the income disparity between white and Black Americans has endured, with the median U.S. household income standing at $84,600 for the former and $51,600 for the latter in 2018, according to Pew Research Center. The total racial wealth gap amounts to over $10 trillion, the Brookings Institution reports.

Longstanding racial inequities also play out when it comes to accessing capital, which includes personal and family savings, business loans from banks and personal credit cards. “Minorities are disproportionally hurt by the cost of and lack of access to capital,” according to the Ewing Marion Kauffman Foundation.

“I think employee ownership will offer more opportunities for advancement,” said Elise Justice, a 30-year-old scheduler who’s worked at Apex for over four years.

While everything feels the same right now, she’s “looking forward to seeing not only how it affects me as an individual, but how it helps the company grow.”

Justice, who lives in Fort Lupton, first started in an administrative role, then grew into her current position. The changes she’s most excited about include a 401(k) plan, new equipment and more crews, she said in an email.

Gerardo Fernandez, 59, and Jose Mikarez, 34, inspect a 14-foot-deep hole that they dug as part of a job in Denver on Wednesday, June 22, 2022. Fernandez and Mikarez work for Apex Plumbing, an employee-owned company based in Arvada.

Jintak Han, The Denver Post

Gerardo Fernandez, 59, and Jose Mikarez, 34, inspect a 14-foot-deep hole that they dug as part of a job in Denver on Wednesday, June 22, 2022. Fernandez and Mikarez work for Apex Plumbing, an employee-owned company based in Arvada.

Apex isn’t the only Colorado business to embrace employee ownership. About 100 other companies in the state are employee-owned, including Denver restaurant group Edible Beats, according to the National Center for Employee Ownership, a nonprofit membership and research organization.

Data shows “employee-owned businesses are more productive, more profitable, better places to work,” said Michael Brownrigg, cofounder and partner at A&H. “But, right now, many, many people don’t know about employee ownership or they’re skeptical about it.”

In the U.S., the most common method of employee ownership is an employee stock ownership plan, which is considered a type of retirement plan, NCEO reports. Around 6,500 companies nationwide use this plan, with about 14 million workers participating.

“The main benefit of employee ownership is that it gives employees the ability to benefit from the success of the company, often in the form of the value of company stock,” according to NCEO.

A&H also utilizes an employee stock ownership plan, using its “employee-led buyout” model. The firm, which is Black-owned, finds and purchases privately-held businesses with $1 million to $4 million in earnings before interest, taxes, depreciation and amortization, and at least 40 employees – at least one-third of which identify as people of color and half of which are considered low-income, according to A&H’s website.

Then, the transition into 100% employee-owned businesses takes place. Companies of interest typically fall in the manufacturing and essential service sectors, including maintenance, landscaping, cleaning, food processing and more.

Hugo Alonzo, 41, fills a hole ...

Jintak Han, The Denver Post

Hugo Alonzo, 41, fills a hole he dug to access a client’s plumbing in Denver, Wednesday, June 22, 2022. Alonzo works for Apex Plumbing, an employee-owned company based in Arvada.



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