URS Corporation
Address:
100 California Street, Suite 500
San Francisco, California 94111-4529
U.S.A.
Telephone: (415) 774-2700
Fax: (415) 398-1905
http://www.urscorp.com
Statistics:
Public Company
Incorporated: 1950
Employees: 16,000
Sales: $2.21 billion (2000)
Stock Exchanges: New York Pacific
Ticker Symbol: URS
NAIC: 23332 Commercial and Institutional Building Construction; 23411 Highway and Street Construc- tion; 23491 Water, Sewer, and Pipeline Construction; 23594 Wrecking and Demolition Contractors; 54133 Engineering Services; 54131 Architectural Services
Company Perspectives:
What We Do: Planning and Design: We develop and improve the transportation systems and infrastructure on which society depends. We produce high-quality designs for buildings and facilities that keep pace with the needs of a new century. We provide environmental solutions that restore ecosystems and protect the earth's resources. Construction Services: We apply proactive and proven program and construction management techniques to meet quality, schedule and cost objectives. We bring the value of practical experience in planning, design, and program and construction management to dispute resolution. We provide demolition and remedial contracting solutions for all phases of site decommissioning.
Key Dates:
1950: URS Corporation is founded.
1980: URS has 40 offices in the United States.
1987: URS goes public under the name Thortec.
1989: Turnaround specialist Martin M. Koffel is hired as CEO.
1990: URS reverts to old name as restructuring is completed.
1996: The purchase of Greiner Engineering doubles URS's size.
1997: The Woodward-Clyde purchase again doubles URS's size.
1999: The Dames & Moore acquisition makes URS the largest U.S. engineering firm.
Company History:
Ranked number one on ENR's list of the top U.S. design firms, URS Corporation has 300 offices in 30 countries. Aside from being the largest pure engineering firm in the United States, URS is also a top ten construction firm. It is a leader in airport construction and is also involved in environmental consulting.
Origins
URS Corporation was founded in 1950. Though a fairly successful firm, it would not grow to become an engineering industry giant until the 1980s and 1990s.
URS's international aspirations manifested themselves fairly early on. The company began doing business in Japan in the mid-1960s. For the next 20 years, however, nearly all of its work there would come not from local clients, but from the U.S. government, which hired the firm for projects at military bases. Although it found the Japanese market practically closed to outsiders, URS was able to perform some work in the United States for Japanese firms.
By the mid-1980s, URS Corporation had 40 sales and engineering offices in the United States. The company maintained these offices with the realization that the services market was, indeed, primarily local. Fierce competition for large billion-dollar projects, however, was prompting more giant builders to come look for smaller projects. The company's backlog was $70 million in 1985.
Four of the company's top executives, including Chairman and CEO Arthur Stromberg, were charged with overstating the company's fiscal 1986 revenues and income (reported at $115.7 million and $8.7 million) by $8.4 million. They later settled the case without admitting or denying the charges.
The company's largest shareholder, Richard C. Blum, was the husband of former San Francisco Mayor Dianne Feinstein, who was running for governor. This resulted in the SEC investigation getting national media attention, particularly from the Los Angeles Times, which revealed that payments totaling $35 million were made to settle shareholders' lawsuits at URS and two other companies in which Blum was a major shareholder.
Public As Thortec in 1987
URS underwent a major restructuring in 1987. It changed its name to Thortec International Inc. (and its NYSE ticker symbol to THT) in November and offered a 35 percent interest in its URS International Inc. subsidiary on the London Unlisted Securities Market. In addition, the company formed a new 1,800-person subsidiary, URS Consultants Inc., to handle its domestic consulting services, which were centered on infrastructure, waste management, and pollution control. As part of the restructuring, Thortec International was expanding its range of waste treatment services, project management software systems, and forensic engineering services.
Around this time, URS was lobbying for more access to the Japanese market. To further this end, the company acquired an architectural firm in Japan and formed a venture with an engineering firm there. In 1988, the Hong Kong office of URS International landed a contract to design the $49 million, 450-room Hua Qiao Mansion Hotel being built in Beijing, China.
The board sought a new leader to turn the company around. One director, Bill Walsh, chairman of Sequoia Associates, a Menlo Park buyout firm, suggested his friend Martin M. Koffel, who had formerly been president of ophthalmic products and services company CooperVision Inc. and had helped position Oral-B Laboratories Inc. for its sale to Gillette Co. Koffel was named president and CEO of Thortec International in May 1989. Former CEO Arthur H. Stromberg remained chairman before resigning that post one month later.
Koffel, a native of Australia, had been a mining engineer before leading CooperVision. Koffel's management team would guide Thortec back to its core business of engineering. The firm's financial problems had stemmed from an overactive diversification policy. Soon, URS Engineers would be the company's only operating unit.
In June 1989, Thortec relocated its headquarters from San Mateo to the San Francisco office of its largest subsidiary, URS Consultants. Revenues fell about 10 percent, to $99.4 million, in the fiscal year ended October 31. The company lost $19 million in 1989 and $12 million the year before. By February 1990, Thortec had defaulted on interest payments to one of its creditors; the prospect of bankruptcy had been raised. A restructuring plan announced in October 1989 had called for San Francisco investment firm Richard C. Blum and Associates to acquire 53 percent of the company in return for $12.5 million in cash.
Thortec reverted to its old name of URS Corporation by the time its restructuring was completed in late February 1990. Blum ended up with a 68 percent holding in URS, while Wells Fargo Bank owned 14 percent. The company's debt was cut from $73 million to $37 million in the process. In June 1991, URS had a public offering, which further helped reduce debt.
URS closed its software unit in May 1990. Westborough, Massachusetts-based Mitchell Management Systems Inc. had accounted for 8 percent of URS's $99.5 million in revenue for fiscal 1989, but lost $3.3 million that year and $1.4 million the year before.
The restructuring produced some tangible results. URS became profitable again in 1991, when revenues were about $120 million. By October 1992, backlog had increased to $278 million, up 25 percent in a year. Revenues rose 11 percent while net income leaped 86 percent to $4.3 million. The public sector accounted for 80 percent of business.
A new subsidiary, URS Telecommunications, based in Washington D.C., was created in 1995 to focus on the emerging wireless telecommunications market. It would be the transportation segment, however, that would provide URS with its best opportunity for growth. Revenues were $180 million for the 1995 fiscal year, producing net income of $5 million--both figures up 10 percent.
Big-Time Growth in the Late 1990s
URS doubled in size in 1996 through the purchase of Dallas-based Greiner Engineering Inc. for $63.5 million in cash plus 1.4 million shares of common stock worth about $10 million. This increased URS's total revenues to $400 million per year. The deal doubled Greiner's workforce of 1,500 and made URS Greiner a top-five architectural company.
Greiner, which specialized in designing schools, brought with it some international operations, based in Malaysia, and reduced URS's dependence on the environmental business and the federal government. According to ENR, URS and Greiner had been considering a merger for three years preceding the deal.
In August 1997, URS bought Denver-based Woodward-Clyde Group Inc. in a stock-plus-cash deal worth $100 million. The purchase again doubled URS Corp.'s size, making it the country's fifth largest engineering company, with revenues of $800 million and 6,000 employees.
Transportation projects accounted for a third of URS Corp.'s business in the late 1990s. This sector was given a boost by the $217 billion Transportation Equity Act for the 21st Century (TEA-21) approved by Congress in 1998. As a result, URS was named joint program manager of a ten-year, $3.2 billion project to connect commuter trains between Long Island, New York, and Manhattan's Grand Central Terminal. URS would split $24 million in engineering fees with its partner for the project, Bechtel. Other highway jobs included a $12 million upgrade of I-15 in Salt Lake City and $20 million worth of work on Miami's Palmetto Expressway.
By October 1998, URS was searching for an acquisition to help the firm enter the European market. Private finance initiative schemes were making the United Kingdom a particularly attractive market. In early 1999, URS bought Thorburn Colquhoun, a £25 million-a-year civil and structural engineering firm based in Great Britain.
On the other side of the world, URS Corp.'s Greiner Engineering unit was participating in the design of a terminal at one of China's busiest airports in Guangzhou. Pasadena, California-based Parsons Corp. and the Guangdong Provincial Architectural Design Institute were also collaborating on the project.
URS continued its buying spree by acquiring, in June 1999, the Los Angeles-based Dames & Moore Group for $312 million in cash, plus the assumption of $300 million of debt. Dames had become susceptible to a takeover because its stock price had fallen by 40 percent since 1992 as the company pursued an aggressive acquisition policy. One of Dames & Moore's divisions was a leading provider of construction and program management services--likely to be highly marketable by URS in the coming transportation boom. Most of Dames & Moore's revenues, however, were coming from environmental consulting.
After the deal, URS had annual revenues of $2 billion and 15,000 employees in more than 30 countries. Revenues and employment had grown tenfold since 1996. It was perceived as a leader in the consolidation of the engineering services industry.
URS's newfound mass promised to help it win larger, more lucrative contracts. The company began to compete with the giants of the engineering industry, such as Fluor Corporation, Brown & Root Inc., Bechtel Group Inc., and Parsons Corporation.
At the end of 1999, North America accounted for 90 percent of the firm's revenues. The international acquisitions, however, gave the company a platform from which to grow abroad. Koffel expected the firm's size to double by 2005. URS was already involved in some high-profile projects overseas, including work on London's Millennium Dome and Sydney's Olympic stadium.
URS sold its DecisionQuest unit, which provided litigation support services, to a management-led group in June 2000. URS realized $20 million in cash from the deal, all earmarked for debt reduction.
While it was acquiring companies during the 1990s, URS's main operating unit also was picking up names. It was known as URS Greiner Inc., then URS Greiner Woodward Clyde, until autumn 2000, when it reverted to the URS Corp. name.
Thanks to its growth in business at home and abroad, the company planned to hire more than 500 employees in the summer of 2001. Employment was 15,800 before the recruitment drive. Although CEO Martin Koffel expected the transportation market to mature in the next five years, the company planned to push energy and wastewater services after that. URS also continued to design airports and other public facilities.
Principal Divisions: Parent; Domestic; International.
Principal Competitors: AECOM Technology Corp.; Bechtel Group Inc.; CH2M Hill Cos. Ltd.; The IT Group, Inc.; Jacobs Engineering Corp.; Parsons Corp.
Further Reading:
Back, Brian J., "URS Corp. Bulldozes Its Way Through an Era of Acquisitions," Business Journal (Portland), February 25, 2000.
Bangsberg, P.T., "2 US Firms to Design Baiyun Airport Hub," Journal of Commerce, April 6, 1999, p. 6A.
Barron, Kelly, "Roads Less Traveled," Forbes, September 3, 2001, pp. 46+.
Bartholomew, Doug, "First, Analyze the Processes," Industry Week, November 1, 1999, p. 37.
Bullard, Stan, "Acquisition to Add 40 URS Jobs," Crain's Cleveland Business, December 1, 1997, p. 6.
------, "Heckaman Bolts URS After '93 Merger He Designed," Crain's Cleveland Business, January 10, 1994, p. 2.
------, "URS Eyes a Move Downtown," Crain's Cleveland Business, March 28, 1994, p. 1.
Byrne, Harlan S., "URS Corp.; Timing Looks Right for Engineering Firm," Barron's, November 9, 1992, pp. 38, 40.
Carlton, Jim, "SEC Probe May Make Feinstein Spouse More of an Issue in California Campaign," Wall Street Journal, October 5, 1990, p. A20.
------, "URS, Once Near Bankruptcy, Is at Pinnacle of Industry," Wall Street Journal, December 16, 1999, p. B4.
"Chapter 11 a Possibility; Thortec Tender May Be in Jeopardy," San Francisco Chronicle, February 16, 1990, p. C3.
Czurak, David, "From Summer Intern to Boss," Grand Rapids Business Journal, December 12, 2000, p. 5.
------, "URS--A Name to Remember," Grand Rapids Business Journal, October 16, 2000, p. B2.
Davies, John, "US Firms Find It Hard to Build for Japanese," Journal of Commerce, October 16, 1987, p. 5A.
"Engineer Set for Big Time After US Buy-Out," Building, February 5, 1999, p. 19.
"Ex-Thortec Officials Settle SEC Charges of Inflating Results," Wall Street Journal, May 25, 1990, p. A18.
Graham, Jed, "Transit Bill Fueling Heavy Construction," Investor's Business Daily, November 17, 1998, p. B11.
Hayes, Thomas C., "Big Builders Learn to Think Small," New York Times, July 28, 1985, Sec. 3, p. 1.
Hurtado, Robert, "Rebuilding U.S.: In Line to Profit," New York Times, January 7, 1993, p. D6.
Korman, Richard, "Behind the Dames & Moore Deal," ENR, May 17, 1999, p. 10.
------, "Dames & Moore Tried to Hold On," ENR, May 24, 1999, p. 15.
------, "URS-Greiner Deal: Will Mid-Sized Models Be Obsolete?," ENR, June 3, 1996, p. 10.
Marsh, Peter, "Engineer Constructs a Route Towards Expansion," Financial Times, Companies & Finance Sec., December 10, 1999, p. 30.
Materna, Jessica, "Engineering Firm Flexes Hire Power," San Francisco Business Times, July 20, 2001.
Matta, L. Matthew, "Blum Supports URS Acquisition," Private Equity Week, May 17, 1999, p. 11.
Mercer, Tenisha, "Architectural Firm Considers Its Acquisition an Opportunity," Crain's Detroit Business, November 25, 1996, p. 45.
Pachuta, Michael J., "URS Laying the Groundwork for Large Infrastructure Deals," Investor's Business Daily, June 8, 1999, p. B18.
Phaungchai, Naruth, "Duo Engineers URS Deal," Bank Loan Report, June 28, 1999, pp. 12+.
Pilgrim, Kitty, Interview with Martin Koffel, Capital Ideas, CNNfn, May 6, 1999.
"Thortec Ends Restructuring, Changes Name," San Francisco Chronicle, February 22, 1990, p. C2.
Source: International Directory of Company Histories, Vol. 45. St. James Press, 2002.
