Westar Expands HQ, Ramps Up Revenue, Eyes Acquisitions
Rob Topping, president and chief operating officer of Westar Corp., is fortifying the defense contractor’s St. Charles County operations.
He is expanding the company’s newly designated headquarters, consolidating top management here, acquiring two other companies and projecting 2004 revenue will double last year’s total.
During the past few months, Topping has officially relocated the company’s headquarters from Albuquerque, N.M., to Westar’s offices in Missouri Research Park. Three senior managers, including Frederick Meek, director of human resources, are relocating from New Mexico.
In addition, Joe Pruett was just hired from WebMD in Florida for the newly created vice president of finance position. Topping also hired Vanessa Chandler, a lawyer with Bryan Cave’s Washington, D.C., office, as Westar’s general counsel and vice president. She also is relocating to St. Charles.
Although the company has maintained key offices in St. Charles County for more than 13 years, the headquarters relocation will set up greater synergy by combining the staff and leadership team in one place, Topping said.
In addition, Westar is hiring 20 employees for its human resources, accounting, finance and contracts departments.
“Compared to Albuquerque, this region has much richer talent pools,” Topping said. “There is such an emphasis on higher education. We have been conducting about eight interviews a day for the past three weeks.”
Topping expects to break ground within the next 30 days on a $2 million, 20,000-square-foot expansion to Westar’s current 40,000-square-foot office. A contractor has not been selected yet, but architects Mark Duitsman and Jack Holleran, who designed the original building, will oversee the expansion.
The company’s current space is a far cry from the 1,200-square-foot Bridgeton office where Westar began in the mid-1980s. “The HVAC didn’t work well, so in the summer we had to work in T-shirts, and in winter we had to work in coats,” Topping said.
The building addition is just one indication of Westar’s rapid growth. Topping and his management team have led three acquisitions since 2000 and are closing in on two more this quarter.
One of the companies, which develops aerospace modeling software, signed a letter of intent in mid-April to be acquired by Westar. Topping said he expects to close the deal this summer.
Acquisition talks are under way with the second company, which develops unmanned aerial vehicle (UAV) technology. Confidentiality agreements prohibit Topping from sharing names and details, but he said each acquisition would cost about $10 million.
Not including the planned acquisitions, Topping projects Westar’s revenue will nearly double to $140 million this year, compared to $77 million in 2003. The company experienced organic growth of 38 percent in 2003 over 2002, and saw its growth through acquisitions increase 78 percent during the same period, Topping said. Revenue for this year’s first quarter was 114 percent higher than the same period in 2003, he said.
Westar’s 2003 revenue has increased 353 percent compared to the $17 million the company made in 1999. “If you’re good, you’re growing fast,” Topping said. “Growth is a sign of success in your market.”
All of these developments are part of Topping’s larger plan to consolidate fragmented elements of the aerospace and defense industry and grow the company to $250 million in revenue by the end of 2005.
Westar is privately held, but Doug Childress, chief financial officer, told the Business Journal in December that executives are considering taking the company public by 2005.
Westar will pay for the upcoming acquisitions with part of the $38 million in equity and debt financing it secured Dec. 11 from the Edgewater Funds with participation by Mesirow Financial’s Private Equity Division, both based in Chicago. Edgewater committed the majority of the equity. Enterprise Bank of St. Louis provided the balance in a term loan and working capital facility.
Westar provides services to the Department of Defense and defense industry customers such as The Boeing Co. and Bell Helicopter. More than 90 percent of the company’s business is with the U.S. military. The company specializes in simulation and modeling, information technology, systems engineering, acquisition program support, and logistics services. It also manufactures engine filtration systems for Army helicopters and sells commercial flat-panel displays.
The company’s aerospace and defense group is focused on engineering systems that coordinate weaponry in “inner-air” battle space where helicopters, UAVs and missiles are used to achieve a military objective, according to the company’s vision statement.
“Training simulation and support is an area the Department of Defense has been focused on in terms of increasing readiness of our armed forces,” said Peter Arment, an aerospace analyst with Newport, R.I.-based JSA Research Inc. “Post 9-11, we’ve seen a step up of readiness training and the contract awards that have been handed out associated with that.”
In December, Westar acquired Huntsville, Ala.-based ELMCO Inc., which designs battlefield and missile-defense simulation programs for the Army. In 2002, Westar bought Brunswick, Maine-based Great Pond Technologies Inc., a business that creates mathematical models that describe the way helicopters operate in various environments. In 2000, Westar acquired Daleville, Ala.-based Cobro Corp., the Army’s contractor for helicopter logistics.
Founded in 1986, Westar employs about 120 people in St. Charles and another 680 in 26 locations around the world.