Engineers Thornton Tomasetti and Weidlinger Merge
Thornton Tomasetti Inc. and Weidlinger Associates Inc. say they will merge and operate under the Thornton Tomasetti name. The two New York City-based engineers have a combined $240 million in annual revenue. Both are privately held and declined to release financial details.
Thornton Tomasetti has $180 million in 2014 revenue and is ranked 71 on ENR's Top 500 Design Firms. It has roughly three times the revenue reported by Weidlinger.
The 47 Weidlinger shareholders exchanged their stock for stock in the combined venture, says Raymond Daddazio, Weidlinger's chief executive. "Cash is not changing hands," he says.
“[In] most mergers people start with balance sheets,” says Thomas Z. Scarangello, who became Thornton Tomasetti's chairman in 2008 and CEO in 2011. “We started with cultures and goals, which we found were similar.”
The deal creates a firm offering investigation, analysis and design services. Weidlinger has a transportation practice that is a major part of its overall business. Thornton Tomasetti's work in the last year was concentrated heavily in buildings, at 95%.
The two companies say they plan to establish a separate research-and-development entity that will seek outside investors.
Founded in 1956 as Lev Zetlin Associates by Lev Zetlin, Thornton Tomasetti has practices in structural engineering, facade engineering, forensics, renewal, construction engineering, property loss consulting and sustainability.
It is best known for its commercial work—especially supertall-building and sports-facility design. Current projects include the planned 1-kilometer-tall Kingdom Tower, under construction in Jeddah, Saudi Arabia, and the Minnesota Vikings U.S. Bank Stadium in Minneapolis.
Paul Weidlinger founded Weidlinger Associates in 1949. It designs and rehabilitates buildings, bridges and infrastructure. It also develops advanced analysis software. Other services include vulnerability assessment, risk analysis, soil-structure interaction, sustainability, and forensic, earthquake, wind and blast engineering.
“Over the years, we competed for talent but not often for jobs,” says Daddazio.
Thornton Tomasetti will retain three Weidlinger brands: Weidlinger Applied Science, Weidlinger Protective Design and Weidlinger Transportation. Scarangello will remain in his current role. Daddazio will join Thornton Tomasetti’s Robert DeScenza as co-president, until DeScenza retires at the end of next year. Daddazio and two other Weidlinger board members, Tod Rittenhouse and Grant McCullagh, are joining the 11-person Thornton Tomasetti board.
Innovation Plan To Seek Investors
By May, Thornton Tomasetti plans to establish a research and development holding company and will seek outside investors “to incubate, develop and market product and service innovation.” Daddazio says the new venture is written into the deal.
Scarangello and Daddazio say there will be no layoffs because there is no redundancy of roles. Over the next six months, as leases are up, offices in Washington, D.C., and Los Angeles will merge. Thornton Tomasetti will remain headquartered in New York City, at its current address and at Weidlinger's location.
The idea of a merger was born over a Scarangello-Daddazio lunch last October in Jacksonville, Fla., when both were attending the Construction Industry Round Table. Scarangello was filling Daddazio in on Thornton Tomasetti's five-year plan.
The conversation led to the idea of combining forces. Weidlinger had turned down all previous suitors—about one a month, says Daddazio—because Weidlinger’s applied-science practice never gets properly valued when only traditional revenues are taken into account.
This was an exception. “We found we were very much aligned around innovation, internal R&D and intellectual property,” says Daddazio. For Weidlinger, “a bigger partner can accelerate innovation,” he adds.
The firms' boards of directors and shareholders—Thornton Tomasetti has more than 140—are unanimously backing the merger. “It’s going to be a lot of work, but everyone is juiced,” says Scarangello.
