By Scott Robertson
Two engineering firms that have taken part in several major projects in the Tri-Cities over the last few years are merging. S&ME, which has a Tri-Cities office on Eastern Star Road in Kingsport, is acquiring Littlejohn Engineering, which has an office on Sunset Drive in Johnson City, as a wholly owned subsidiary. S&ME is headquartered in Raleigh. Littlejohn is headquartered in Nashville.
Both companies have worked on several regional recently, including:
* Cash Hollow Sewer Basin and Pump Station evaluation
* Stormwater sampling services
* Broadway, Main Street & State of Franklin Road water and sewer improvements
* East Tennessee State University stormwater mapping
* Broadway and Main Street drainage improvements.
“In the Tri-Cities area, S&ME has a long history of providing geotechnical, environmental and construction-related services going back to the 1970s,” Randy Neuhaus, S&ME president and CEO, said. “In recent years we have provided a lot of water-related services, while the Littlejohn group has worked in wastewater and environmental solutions through their office in Johnson City.”
Neuhaus said he does not foresee either consolidation or immediate growth in the two Tri-Cities offices. “The services that Littlejohn does in the Tri-Cities area are generally wastewater treatment-related – stormwater and Phase I and Phase II projects. That lines up with a lot of the same kind of work that S&ME does in the Tri-Cities. We do have the geotechnical material testing there as well. They’ll bring the design to the wastewater and water treatment side that we don’t have. The overlap of services in the Tri-Cities is more environmentally related, where we can work together and share resources. So while this won’t have a tremendous impact on our individuals or offices in the Tri-Cities, it will bring more resources to our projects there.”
While the two companies have worked independently in the past, there has been some overlap, Neuhaus said. “We have worked on some of the same projects in a complementary way. They would have been the civil designer where we would have provided construction testing services or the geotech or the environmental. We have even been a client to Littlejohn on occasion.”
By joining forces, S&ME and Littlejohn will create an engineering firm with more than 1,100 employees in more than 30 locations across the U.S. It will easily rank, by revenue, within Engineering News Record’s top 100 design firms. &ME currently employs more than 970 people. Littlejohn employs more than 130.
S&ME is currently organized into five business units. Three focus on service lines: geotechnical, environmental, and construction services. Two focus on market sectors: transportation and energy. Littlejohn will fill another niche within S&ME by becoming its sixth business unit, focusing on design and planning.
“The combined firm will be equipped to offer more comprehensive engineering and design services for our clients’ projects, from beginning to end,” Neuhaus said.
In the past, S&ME was traditionally a geotechnical and environmental construction materials testing firm. But, Neuhaus said, “Part of our strategic initiative is to be more of a full-service firm. That’s what clients are looking for these days.”
“Littlejohn brings to S&ME a bigger design component. We have had some design services in different markets, but we want to grow that portion of our business. What Littlejohn brings is that site-civil piece. The water resources and wastewater market sectors that Littlejohn is in are of interest to us as well.”
“With what we do on the very front end of projects – natural and cultural resources, environmental resources, the geotech – and on the end of the project doing construction – soil and concrete testing – now we add the design component to the middle,” Neuhaus said. “That means we can bring our clients from the very beginning all the way through to the end.”
S&ME has been in the market for a design partner for some time, Neuhaus said. “I have, over the last two to three years been in dialogue with various firms around the Southeast.”
By bringing a Southeastern firm into the fold, Neuhaus said, S&ME will be able to leverage its own existing clients. “Once we have that established, then we will feel comfortable expanding into other geographic areas.”
“So this has the potential to get us in the door on some projects we wouldn’t have done in the past, but more importantly, it will give our existing clients an expanded complement of service. Also, we will be able to look at the clients that Littlejohn has and provide our services to them. In comparing notes between the two companies, there are some good opportunities to respond to some RFPs (requests for proposals) with our new complement of services.”
Neuhaus says the addition of Littlejohn creates an immediate increase of almost 20 percent of net revenue. “We feel like the combination of the firms gives us the opportunity for 10-15 percent revenue growth year in and year out on average.”
Jim Littlejohn, president of Littlejohn, said the merger will provide value for his company, its employees and its clients. “Our firms share a commitment to creating positive work environments that value collaboration, creativity and innovation, and we invest in our employees. We also share a commitment to providing top quality and responsive services to our clients. By merging our cultures and adopting lessons from one another, we can create an even stronger combined company.”