Saturday, March 7, 2009

This post is about the "larger" companies in the Reprographics Industry

The reprographics industry, like many industries, is “populated” by large companies, medium size companies, and small companies. The reprographics industry, being a rather small sub-industry of the much larger printing and graphics industry, does not have a lot of large companies, but there are a lot of small companies. In using the terms “large, medium and small”, simply from my own perspective, a “small” company is one that has fewer than 30 employees, a “medium” company is one that has more than 30 employees but fewer than 100, and a “large” company is one that has 100 companies or more. Prior to the current recession impacting the industry, small, medium, and large would equate, annual-sales-dollar-wise to $250k to $3 mil for small, $3 mil to $12 mil for medium and more than $12 mil for large. Those $ sales-volume ranges are based on a mix of factors and, certainly, “average pricing” is a major factor. A larger company with lower overall average pricing would likely have annual sales revenues less than $12 mil. Without question, many people in the industry would not agree with my opinion about the “cut-off’s” for small, medium and large. No problem; everyone is entitled to their own opinion.

Based on Sales in the U.S.:
- ARC, of course, is the largest company in the reprographics industry. ARC has dual HQ’s in California. Sales for Year 2008 were around $700 mil.
- Thomas Reprographics, I think, may be the second largest company in the industry. Thomas is based in Dallas, TX.
- ABC Imaging, I believe, is the third largest company in the industry. ABC is based in Washington, D.C.
- NRI may well be the fourth largest company in the industry. NRI is based in New York City.
- If we consider Service Point U.S. as a standalone business, SP may be in the next position, or SP may be number four, which would push NRI down to five. SP US is based in Boston, MA.
- (I did not provide, nor will I estimate, Year 2008 sales for Thomas, ABC or NRI. Even if I knew what their Year 2008 sales were, they are privately-held businesses, and it would not be right for me to talk about that information.)

Based on “World-Wide” Sales:
- ARC is the largest.
- Service Point (considering its extensive UK and European operations) comes next. SP is based in Spain. SP’s consolidated 2008 sales, Y-T-D through Q3 2008, were reported to be around 174 mil Euros; at today’s exchange rate that would be approximately $223 mil in US Dollars.
- Thomas Reprographics is probably third.
- ABC is likely fourth.
- I have no idea what to say after that, since there may be some large companies in Asia or Europe that I’m completely unaware of.

Acquisition Activities of the Top 5 U.S. Reprographers:
All of the five companies I ranked in U.S. reprographics industry have not just grown organically, but by acquisition as well.

- ARC - frankly, I’ve lost track of how many acquisitions ARC has completed since it started acquiring companies. I’m sure one could refer back to ARC’s SEC filings, read through them, then come up with a total. Perhaps it has been more than 70 by now. ARC did not just acquire “one” business per market it wished to enter. In quite a number of different markets, ARC completed multiple acquisitions.
- Thomas Reprographics – Thomas has completed quite a number of acquisitions in Texas, [the biggest one, so far, was A&E The Graphics Complex, formerly owned by members of the Gremillion family (excellently run business)]; Thomas has also acquired companies in Arizona, Florida and Minnesota.
- ABC Imaging – ABC has also completed multiple acquisitions, but, from what I know about ABC, ABC has not acquired as many reprographics companies as the other “members” of the top five reprographers in the U.S. I believe ABC’s very first acquisition was Topel Imaging in Washington, DC [Topel was consolidated into ABC’s operations, and Blain Topel, one of the hardest working young men I’ve ever known in the industry, is a VP (I think of Operations) at ABC. Blain is the son-in-law of Gary Rowley, one of my ex-partners from my Rowley-Scher days.] ABC has also completed acquisitions in the UK, in Dubai and in Denver. ABC has probably completed a few other acquisitions, but I’m not aware of those. My SWAG estimate is that ABC’s organic growth has been far more significant than its acquired growth. A key to ABC’s growth was a national FM deal it won with HNTB, the latter one of the largest A/E firms in the U.S.
- NRI – NRI has completed multiple acquisitions; NRI has acquired companies in Boston, Washington, DC, Philadelphia, and New Jersey.
- Service Point US – SP has also completed multiple acquisitions in the U.S., but it appears that they’ve not completed any acquisitions in the U.S. the past few years. (On the other hand, SP has been very acquisitive in the UK and in Europe. SP, the European based company, actually entered the U.S. market by acquiring the former Charrette Pro Graphics operations.)

Similarities among the Top 5 U.S. Reprographers:
- All have extensive “FM” (On-Site) business segments.
- All have completed multiple acquisitions.
- All operate “muti-market” operations.
- All are IRGA members.

Other comparisons:
- ARC owns The PEiR Group. Quite a number of ARC’s acquired companies were formerly ReproMax partners and associates.
- Thomas Reprographics is a ReproMax partner.
- NRI is a ReproMax partner.
- ABC may be a member of GlobalGrafixNet (kind of a PEiR-Group-like organization primarily in Europe and the UK). ABC’s webs-site does not mention membership in GGN, but GGN’s web-site does say that ABC is a member of GGN (and, the only U.S. member.)
- Service Point owns GlobalGrafixNet.

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