The Yates Companies, Inc. History

Company Perspectives:

The Yates family of construction companies prides itself on producing the highest quality work in the areas of: General Construction, Construction Management, Design/Build, Engineering, Electrical, Forest Products, Marine, Industrial, Heavy Commercial, Retail, Processing, Hospitality, Utility, Resort, Casino, Medical, Corporate, Institutional, Renovation, and Environmental.

Key Dates:

1964:

W.G. Yates & Sons Construction established by William Gully Yates and family.

1989:

Yates opens Jackson, Mississippi, office.

1994:

Gully Yates dies.

1999:

The Yates Companies are formed following merger with JESCO Inc. and Blaine Construction Company.

Company History:

With its headquarters in Philadelphia, Mississippi, The Yates Companies, Inc. is a holding company whose subsidiaries are involved in virtually every area of construction: commercial, heavy, electrical, highway, hospitality, industrial, institutional, marine, and multi-family/condominium. In addition, Yates maintains in-house operations, such as asphalt, civil, concrete, drywall, electrical, heavy, instrumentation, marine, millwright, painting, steel fabrications, and steel erection construction capabilities. The main Yates subsidiaries include W.G. Yates & Sons Construction Company and JESCO Inc., both Mississippi based; Blaine Construction Company, operating out of Tennessee; and the Yates Electrical Division, comprised of Merit Electrical, EEC, Edwards Electric Service, and MEI Electrical. In addition to its Philadelphia headquarters, Yates maintains branch offices in Jackson and Biloxi, Mississippi; Memphis, Tennessee; Mobile, Alabama; and Destin, Florida. Yates primarily serves the central and southern United States, plus Oklahoma and Texas, although it was involved in the construction of a major Atlantic City hotel and casino in the early 2000s. The private company is owned and operated by the second and third generations of the Yates family.

1960s Origins

W.G. Yates & Sons Construction was incorporated in 1964 by 51-year-old William Gully Yates, his wife Opal, and their sons, William Gully Yates, Jr., and Andrew Yates. The family's ties to construction actually stretched back another generation, as the founder's father was a builder in Neshoba County, Mississippi. Yates himself started up W.G. Yates & Sons by selling his interest in another Mississippi construction company. Gully, as he was known to his friends, had a reputation for hard work and honesty.

His younger namesake, known to everyone as Bill, would prove an ambitious businessmen with a knack for surrounding himself with talented people. Bill Yates was not able to join the family business until 1967. First he had to complete a law degree at the University of Mississippi, where he also received an ROTC commission in 1965. He then served a two-year stint in Germany in the U.S. Army Corps of Engineers, rising to the rank of captain, as well as being named Engineering Plans and Services Division chief at the U.S. Army's largest NATO training center. When Bill joined W.G. Yates & Sons, it was just a 15-employee operation, generating 200,000 in annual sales. His brother Andrew ultimately decided not to devote himself to the construction business.

Gully Yates was very much in charge of the company for close to 30 years. The company grew steadily during most of this time, taking on larger and larger jobs, and adding to its capabilities in order to offer a complete package of construction services, rather than rely on subcontractors. It was the unreliability of subcontractors, in fact, that led Yates to branch out. Moreover, Yates was able to distinguish itself from typical general contractors who were subjected to the conventional bid process. By becoming more of a full-service operation, the company was able to negotiate bids. Over the years, Yates established in-house divisions to handle sand and gravel and asphalt operations, and opened a ready-mix concrete plant as well as a building supply store. In addition, the company added a complete line of construction services, including preliminary cost feasibility studies, project management, design engineering and construction, equipment installation, site and foundation work, off-site utility work, electrical, plumbing, heavy piping, mechanical services, and refurbishing capabilities. Yates was also able to erect pre-engineered metal buildings.

Nevertheless, it appeared that Yates had reached a level in the late 1980s that was the limit for a business located in Philadelphia, Mississippi, with its population of less than 6,500. In 1989, Yates began to operate in the larger market of Jackson--Mississippi's capital city. This move provided Yates with greater visibility and allowed it to more efficiently compete in the central Mississippi region. In less than two years the company landed such major projects as the Madison County Detention Center; Laird Hospital in Union, Mississippi; an expansion and renovation project for First Mississippi Corporation; the electrical work and stainless steel process piping for a Borden's plant in Jackson; and an expansion and renovation project at Mississippi Baptist Medical Center. Yates also won a number of projects from the University of Mississippi, including the university medical center's Computer Services Center, a baseball stadium, the M Club, the Raspet Flight Research Laboratory, and the Research Center for Advanced Scientific Computing.

By the start of the 1990s Yates was a $70 million company, employing approximately 1,500 people. More branch offices would follow: Butler, Alabama, in 1991 and Mobile, Alabama, in 1994.

Gully Yates died in 1992, leaving the business in the hands of son Bill and grandson, William Gully Yates III. William III had joined the firm after graduating summa cum laude from the University of Mississippi and earnings master's degree from Arizona State University in construction management. What really provided the spark that took Yates to an entirely new level was the decision by the Mississippi State Legislature in 1990 to legalize dockside gambling on the Mississippi River and along the Gulf Coast. Bill Yates told South Central Construction in a 2003 company profile, "Casinos changed everything." In order to comply with the law, the casinos had to be constructed on top of floating barges, requiring specialized construction. Yates personnel developed a unique way to offset tidal surge fluctuations. Yates' chief financial officer, Marvin Blanks, offered The Mississippi Business Journal his analysis of Yates' exceptional growth during the 1990s: "First, we began to get a lot of repeat business, which builds momentum, then we self-performed lot of phases, so when the casinos boomed in Mississippi, we were able to get things done on time--which was very important to them--and didn't have to rely on others. And last, we were able to hire some of the best managers in the industry." The largest of these projects was a casino in Biloxi, Mississippi, and an accompanying 1,780-room hotel, the Beau Rivage, which opened in 1999.

1999: Yates Merges with JESCO and Blaine

In 1999 W.G. Yates took the most important step in its 35-year history when late in the year it agreed to merge with JESCO Inc., based in Tupelo, Mississippi, and its sister company Blaine Construction of Knoxville, Tennessee, both of which were owned by Memphis, Tennessee-based Eagle Ventures. The three companies became part of a holding company named The Yates Companies, creating the largest construction company in Mississippi. With more than 2,000 employees and annual revenues in excess of $600 million, the company instantly cracked the top 50 of the 400 largest contractors in the United States, according to industry journal Engineering News Record. The three companies enjoyed different strengths: Yates was primarily a commercial general contractor while JESCO concentrated on industrial projects. Blaine was the second largest pre-engineered metal building contractor in America. Together, they created a formidable company, diverse, able to share expertise, capable of taking on bigger projects, and able to realize a variety of growth opportunities.

JESCO boasted a history even longer than W.G. Yates. It was founded in 1941 by Joseph E. Staub in Fulton, Mississippi. Staub left the family hardware business to launch a remodeling business, a partnership called J.E. Staub & Co. (It was not incorporated until 1958.) Grossing just $3,000 in the first year, the company struggled for a number of years as it grew into a general contracting company. Joe Staub, who never went to college, was eventually joined by his son Travis, who studied construction engineering at Auburn University and learned the practical side of the business during summer vacations. However, business was so lean in the late 1950s that Travis recalled having to wait on his own paycheck at times because there was only enough funds available to cover the employees, not family members. Just to stay afloat the Staubs had to take out a small business loan and even put a second mortgage on their houses. The company's big break came in 1959. Travis told The Mississippi Journal in a 1988 profile, "I was in my office one day in 1959, when Daddy came in and said, 'We've got a tire plant to build in Tupelo,' I asked him where the plans and specifications were and about the price. He said, 'Well, I just agreed to build it for this price.' And he had it on a napkin. I said, 'I don't know anything about a tire plant.' We started from scratch and did it."

The Penn Tire plant spurred JESCO's growth in a number of ways. With an increased work force from the job, the company was able to take on larger jobs, many of which it designed itself. Moreover, Penn Tire provided JESCO with an opportunity for diversification. At the time, Penn Tire was a non-union business, but it had a major need for millwrights to move around a vast amount of equipment. The only available millwrights, located in Memphis and New Orleans, were all unionized. Instead, Penn Tire turned to JESCO who bid on the business and won.

Branching out in all directions continued to be the pattern for JESCO during the ensuing years. In the 1970s it launched its own mechanical and electrical divisions, and when pre-engineered metal buildings became a viable alternative to general construction, the company created its own metal buildings subsidiary. It was because of the growing number of subsidiaries that JESCO Inc. was formed to serve as a parent company. In 1978 Joe Staub retired and because older stockholders wanted to cash in, JESCO was sold to AMCA International Corporation, a Charlotte, North Carolina, company involved in the non-residential construction, energy, and industrial markets. It turned out to be a fortuitous change in ownership, because AMCA was able to bring the kind of administrative structure that JESCO needed in order to continue its strong growth. According to Travis Staub, "We used to shoot from the hip. (AMCA taught us how to do strategic planning." JESCO also expanded beyond its Mississippi market. At the time of the sale, the company had gross sales in the $20 million range, with 95 percent of that amount derived from Mississippi. Ten years later--after opening offices in Montgomery, Alabama, in 1981 and Atlanta, Georgia, in 1986--annual sales were in the $120 million range, just 40 percent of which came from business in the state.

In 1995 ownership of JESCO changed hands, when AMCA's successor, United Dominion Industries, elected to sell the company to the privately held investment group Eagle Ventures. Eagle was headed by Jack Hatcher, a former UDI corporate officer who had been president of AMCA when it acquired JESCO in 1978. In addition to JESCO, UDI also sold Blaine Construction Company to Eagle. Blaine was a full-service general contractor founded in 1969. Four years after buying the businesses Eagle merged them with W.G. Yates.

2000 and Beyond

The Yates Companies was involved in a number of major projects following the 1999 merger. It landed one of the largest construction projects in the history of Mississippi, a $930 million Nissan auto plant, located near Canton, Mississippi, completed in 2003. The company was contracted by Boyd Gaming Corporation along with partner Tishman Construction of New Jersey to build the first hotel casino in Atlantic City in 13 years. The $1 billion 40-story tower featured more than 2,000 hotel rooms, 11 restaurants, and ten retail shops, numerous entertainment venues, and a 225,000-square-foot gaming area in the casino, plus a 5,000-car parking garage. In the fall of 2002 Yates completed the first phase of a Toyota assembly plant in San Antonio, Texas, which involved the construction of a 2.6 million-square-foot plant. Before that work was even completed, Yates was named the general contractor and construction manager for phase II of the project, which would increase the size of the plant by another 40 percent. Clearly, Yates, now generating annual revenues in excess of $1 billion, had transcended its regional roots. At the same time, the company, still very much controlled by the Yates family, adhered to a commitment to excellence espoused by Gully Yates 40 years earlier.

Principal Subsidiaries: W.G. Yates & Sons Construction Company; JESCO Inc.; Blaine Construction Company.

Principal Divisions: Yates Electrical Division.

Principal Competitors: Fluor Corporation; Jacobs Engineering Group Inc.; The Turner Corporation.

Further Reading:

• Cotton, C. Richard, "Yates Construction Steps to Forefront of Mississippi Construction Industry," South Central Construction, July 2003.
• Dale, Nicholas Jan, "A Bid Scrawled on a Napkin Was the Making of Jesco," Mississippi Business Journal, February 1988, p. 30.
• Fortson, Sanna, "Building a Better Construction Company," Mississippi Business Journal, February 4, 1991, p. 14.
• Gillette, Becky, "Very Big Deal," Mississippi Business Journal, November 29, 1999, p. 1.
• Holliday, Karen Kahler, "State's 2nd Largest Construction Company Sold," Mississippi Business Journal, July 24, 1995, p. 1.
• Wilton, J. "Bill" Johnson Jr., "A Five-Letter Word for Omnipresent--Yates," Mississippi Business Journal, August 20, 2001, p. 3.

Source: International Directory of Company Histories, Vol.62. St. James Press, 2004.

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