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Water Built
ENGINEERING by Jean Gruss | Editor/Lee-Collier
Thomas Missimer, one of the best-known water experts in the world, is also a successful entrepreneur who built three companies. Oil colossus Schlumberger recently bought him out.
Here's a fun experiment: What do you get when you mix science with business acumen?
Thomas Missimer and Schlumberger Ltd.
You may not have heard of the former, but the latter is the best-known company in the oil-exploration business.
Missimer recently sold his Fort Myers-based engineering firm, Missimer Groundwater Science, to Schlumberger. Terms were not disclosed and the Schlumberger folks are tough to pin down. But how can you refuse an offer from a company with $20 billion in annual revenues, especially if you can continue to grow the operation from your hometown of Fort Myers?
Now, Missimer joins a cadre of executives at Schlumberger charged with expanding the company's vaunted oil-exploration technology to water on a global scale. The target is $1 billion in annual revenues.
But the road to recognition as one of the world's foremost water experts hasn't been easy. It included taking his first company public, a costly mistake that Missimer vows never to repeat.
The 57-year-old hydrologist shows no sign of slowing down despite 34 years in the business. One week finds him at a water conference in the Canary Islands and the next he's in the water-starved Middle East advising sheiks. "He's the not the least big fatigued by what he does," marvels Richard Holzinger, Missimer's longtime business partner.
Water business
Missimer's career follows the population boom of Southwest Florida, as large new developments started taking shape in the early 1970s. Missimer joined the U.S. Geological Survey in Fort Myers in 1973 shortly after obtaining his master's degree in geology from Florida State University.
Back then, developers would come to the agency seeking information about aquifers and other water-related issues. Interstate 75 was going to be extended southward through eastern Lee County and with it would come a wave of new development.
But the government agency was often slow in responding to developers' requests, so Missimer and Holzinger started a consulting firm to provide that information more quickly.
With Holzinger, Missimer rented a one-room office on Del Prado Boulevard in Cape Coral in 1976. "We didn't even have a credit line," Missimer says. "Some months you didn't get a salary, some months you got two."
"You can imagine two young guys starting out who didn't know anything," Holzinger recalls. "We did everything; the field work, wrote reports, emptied the trash."
But Missimer had a good reputation among engineers and that opened doors. Many of them were veterans of the U.S. Geological Survey. Holzinger had a business degree and the two started making contacts with engineering firms and performing hydrology work.
Their first project was a study of septic-tank effluent on the island of Sanibel. They charged the city $5,000 for six months of work that resulted in a 300-page report. Holzinger recalls then-mayor Porter Goss telling them: "I guess we're paying you guys by the pound." Goss eventually became a U.S. congressman and director of the Central Intelligence Agency.
Once Missimer and Holzinger got a few projects, they sought bank financing. Missimer likes to recount how Connie Mack III, a Cape Coral banker who eventually became a U.S. senator, turned them down for a loan. Eventually, they obtained financing from another Cape Coral bank.
The firm grew as new residential developments such as Pelican Bay in Naples rose from the scrub. Missimer also helped develop one of the first desalination plants on Sanibel. It did this by partnering with national engineering firms such as Post, Buckley, Schuh & Jernigan, providing them with the related water expertise they didn't have on hand locally. "It's a personal service business," Missimer explains. "We got to know them and did decent work for them."
Missimer worked with local firms too. "Nobody knew what a hydrologist was," he says. So he mailed a letter listing the firm's scope of services to engineering firms. Of the 50 letters he mailed, Missimer says he got 20 responses.
In the late 1980s, environmental agencies were focusing on thousands of leaking underground gasoline storage tanks. Identifying and removing them would turn out to become a huge business because public companies were being held responsible for contamination, even if they hadn't caused it. Missimer rented a room at the Ritz-Carlton hotel in Naples in 1987 for an all-day seminar on the subject that was packed. "Groundwater got hot," he recalls.
Holzinger says Missimer was driven to grow the business. "I would describe him as relentless going after projects," he says. "He takes it personally when he doesn't get them."
Missimer didn't like losing projects to the competition. "He expresses his disappointment in various ways," Holzinger says. Various ways? "Four letter words," Holzinger chuckles.
Public scrutiny
By 1991, Missimer & Associates had grown to five offices and $15 million in annual revenues. But Missimer's dream was to grow his company into a national player. However, he couldn't do that on bank financing alone, so he and Holzinger turned to the public markets.
Missimer's firm wasn't alone. Nearly 20 engineering firms were going public at the time. "That was the heyday of environmental companies," Missimer recalls.
Missimer chose the public market instead of selling out to a competitor. It was a move he would regret later. "If I had to do that again, I would have accepted one of those offers."
A first attempt at going public failed because investors were leery of the Missimer's well-drilling division. That first effort cost the company $400,000 in fees paid to investment bankers, accountants and lawyers. By the time he sold off the drilling company and listed shares of his company on the Nasdaq market in 1991, Missimer estimates going public cost him $700,000. They renamed the company ViroGroup Inc. and the stock eventually rose as high as $12 a share.
But the pressures on the company were intense as shareholders demanded rapidly growing earnings quarter after quarter. The challenge was that the cyclical revenues of the engineering firm weren't welcome by Wall Street investors. "The market is ruthless," Missimer says. "They beat you to a pulp."
Missimer and Holzinger eventually left the company they had created and formed a new company in late 1993, Missimer International. Taking the first company public wasn't the financial boon it was supposed to be. When Missimer left the company, the shares were worth just 38 cents each.
Building two more firms
After taking his first company public, Missimer built his new firm from 1994 to 1999.
It wasn't as hard to start over this time. "We weren't having to pay for our education," Missimer says. "The second time, we got the highest-quality people and the financing was taken care of."
Missimer attributes success in his business in part because of the books he's written on the subject of hydrogeology. One book on water supply brought his firm $10 million to $15 million in new business, he estimates.
But the problem was that it was hard to promise growth to younger employees who were eager to move ahead in their careers. "So you have to suffer some turnover," Missimer says.
Missimer eventually sold the second company to Cambridge, Mass.-based engineering firm Camp Dresser & McKee (CDM) in 1999 and stayed until 2004. By 2004, Missimer was ready to start over and left CDM.
This time, Missimer decided to start over on his own with as few people as possible and founded Missimer Groundwater Science. "A month after I left I got a call from Schlumberger," Missimer says.
The oil-exploration company immediately put Missimer on retainer and sent him to work on projects in far-flung places such as Dubai. "It paid all my overhead," Missimer says.
By 2006, Missimer had built his third company, which was generating $1.4 million in revenues with four employees. Meanwhile, Schlumberger was acquiring other water-related engineering firms to diversify its operations from oil exploration to other fields.
As the world's population continues to grow, efforts to find and move water will intensify. Schlumberger can use the technology it's developed to find oil to do the same with water, Missimer says.
Missimer says despite Schlumberger's size, its employees are entrepreneurial scientists just like him. They made him an offer he couldn't refuse. "I don't have to sign my name to a credit line," he jokes.
The plan now is to open offices in West Palm Beach, Orlando, Tallahassee and other cities up and down the east coast to Virginia. About 20 people will work in the Fort Myers office.
REVIEW SUMMARY
Industry. Engineering
Entrepreneur. Thomas Missimer
Key. Taking a company public may not be the best solution to growing an enterprise.
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