Zweig Seeing Progress in Latest Renovation Project

Known for his work renovating homes in historic areas of Fayetteville, Mark Zweig thrives on challenge.

“I do like a mess,” he said. “I’ve taken on some terrible houses.”

And Zweig tackled a huge mess in 2010, when he agreed to return to ZweigWhite, a company he founded in Boston in 1988 and sold to a private equity group in 2004.

Zweig, who’s originally from Missouri, then retired to Fayetteville to be closer to family and expand his teaching schedule at the University of Arkansas.

ZweigWhite had been a profitable and respected provider of consulting, publishing, research and other business services for architecture, engineering and environmental consulting firms.

But its buyer, Cardinal Growth, “grossly mismanaged” the company, Zweig said, taking on debt and eventually defaulting on the loans. Cardinal’s lender, BIA Digital Partners, foreclosed on the company in 2009.

In July 2010, BIA asked Zweig to come back to help turn ZW around.

“I really didn’t want to come back,” Zweig said.

He was busy teaching entrepreneurship at the Sam M. Walton College of Business and running his development, design and construction business.

Zweig told BIA he wanted to move ZW’s headquarters from Boston to Fayetteville and hire former employees, as well as students, who he knew would be good workers.

“And so they said great, they agreed to everything,” he said. “They gave me some ownership, which was basically worthless. And I came back at 25 percent.”

Now, after refinancing ZW’s debt and hiring key people to help rebuild the company, Zweig says the firm is once again turning a profit, and is on track to do more than $5 million in revenue this year.

Jim Tull, chief financial officer of Crafton Tull in Rogers, said the firm had used ZW for consulting in the years before Zweig’s exit, and he’s happy to see Zweig back at the helm.

“We’re excited for him and I’m sure we’ll use him in some capacity in the future,” he said. “He’s just a very good voice for our industry and knowledgeable about our industry. He’s kind of a go-to guy.

“It’s great having him here in Northwest Arkansas,” Tull said. “His clients literally are around the world.”

Longtime friend Gary Head, chairman and CEO of Signature Bank of Arkansas, said Zweig is incredibly bright and had a “wonderful opportunity” to buy back into the company because its new owners realized he’d done so well running it.

Hearing Zweig speak at a conference in Chicago, Head said he was impressed and realized Zweig’s remarks “carried a lot of weight in the architecture and engineering industry.”

 

‘Fall from Grace’

Zweig started the company by himself as Mark Zweig & Associates. Shortly after, he hired Fred White, a former colleague from a previous employer. They incorporated the business in 1991, and renamed it ZweigWhite in 1994.

“And we grew like crazy,” Zweig said, adding the company twice made the Inc. 500 list of fastest-growing privately held firms.

“That was the thrust, to build up and sell out,” he said. “That’s what entrepreneurship is all about. It’s about creating value in your business that you can sell at the end.”

And that’s what they did in 2004. Zweig, who already owned a home in Fayetteville and had been flying in from Boston once a week to teach at the university, moved to the area full time with his wife, an Arkansas native.

At the time of the company’s sale, Zweig said, it was like a “well-oiled machine” that had always made a profit.

“At its peak, ZweigWhite was about $19.5 million in revenue, and it was a great company,” Zweig recalled. “We had no debt, we had audited financials and we had the best Dun & Bradstreet creditworthiness rating you can have. We were privately held. We had 23 or 24 shareholders, and I owned a little bit less than 50 percent at the time we sold it.

“So it was a pretty rapid fall from grace, really, if you look at where we were and where they ended up in 2009,” he said.

On his return to the company, Zweig found it in complete disarray. The accounting functions had been outsourced to India, yet bill collectors called constantly.

“They were paying our bills, but they weren’t paying our bills,” he said. “We didn’t know who we owed money to. It was just a complete nightmare. I can’t even tell you.”

Seeing his former company in such a debilitated state was very depressing, he said. Part of the reason he came back was pride of creation and hating to see the company he started in such a sorry state.

“It was a lot of things,” he said. “I just felt like it was a challenge worth taking on.”

Unable to find someone he felt could handle the CEO position after his return to the company, Zweig took on that role himself. Then in December 2010, he reinvested in the company, buying back essentially the same stake he’d had previously for about 10 cents on the dollar.

Last year, he found another lender, whom he declined to name. The private company bought out the debt from BIA.

To rebuild the accounting systems, Zweig hired Sonya Stout as director of finance and administration. He also re-hired Claire Keerl, who had worked for him for 10 years at ZW, as head of marketing.

“These people are highly dedicated people who just work tirelessly, whatever hours it takes. Basically none of us turn our phones off, ever. If we’re awake, we’re working.”

 

Moving Forward

The latest additions to ZW are Chad Clinehens, a civil engineer who was a principal at Garver LLC, and Brad Workman, an architect and former executive at Bentley Systems.

Both men will become minority owners in ZW, Zweig said, and Clinehens is being groomed to eventually replace Zweig as CEO.

Clinehens, 38, started in January as ZW’s executive vice president, and leads the firm’s consulting services. He said the job presented an opportunity to come back to his native Fayetteville from Little Rock “and to do something that I thought was a good fit.”

“I believe strongly in ZweigWhite and what their purpose is within our industry,” he said. “It’s very important. The reports, the surveys, everything that we put together, nobody else does that, really, and so it’s just important to get that information out there for architects, engineers, environmental scientists, planners, those in the related industries, to have access to in order to continuously improve their businesses.”

Clinehens said business resources, including consulting, are limited for architects, engineers and related technical professions. ZW’s previous owner didn’t understand the importance of these resources to the industry, so Clinehens’ challenge is to build them back up for the professionals who need them.

Workman, vice president of technology and special projects, is currently rebuilding ZW’s IT infrastructure, and will then take over some new growth areas for the company, Zweig said.

A graduate of the UA’s School of Architecture, Workman also has a degree in computer science. He started teaching at the school in 2008 while on partial sabbatical from Bentley, and then spent three years commuting between Fayetteville and his job at Bentley in Philadelphia. He recently took early retirement after 19 years at Bentley to move to Fayetteville.

 Workman said he knew of ZW from his time at Bentley, a software vendor for the engineering and architecture industries that advertised with ZW. But he didn’t meet Zweig until former School of Architecture dean Jeff Shannon introduced them.

With his long career in technology related to the architectural engineering field, retiring from Bentley and meeting Zweig, Workman said, “It seemed like the stars aligned.”

Once he gets ZW’s IT systems in order, he plans to write articles for some of the company’s magazines about the specifics of technology management in an architecture/engineering environment.

“That’s very consistent with what we do,” Workman said. “We’re all about improving the productivity and the advancement of architecture/engineering firms.”

ZW now employs about 30 people companywide, which includes offices in Chicago, Boston and Durham, N.C.

“Our stated vision is to be a $20 million company in 2020,” Zweig said. “That’s what we’re trying to do. And get back on the Inc. 500 list.

“If you look at where we came from, of being completely burdened with debt that was more than twice our annual revenue, to where now we have debt that is less than 50 percent of our revenue, and we’re profitable, we’re feeling pretty good about things,” Zweig said. “It’s been a big turnaround.

“We’re not completely out of the woods. It’s going to be four to five years. By that time, I’m going to be 60 years old. But we’ll have something that’s very valuable.”