Tuesday, September 27, 2011

ARC's China-based operation acquires company in Shenzhen, China area

News Release

ARC's Chinese Joint Venture Acquires Shenzhen Firm


ARC (NYSE: ARC), one of the nation's leading document solutions companies, today announced that UNIS Document Solutions ("UDS"), its joint venture in China, has acquired a leading print-on-demand service provider in Shenzhen, China, through a newly- formed subsidiary which will operate under the brand name "UNIS Print General," or "UPG."

UPG operates a centralized service facility in downtown Shenzhen, one of the world's fastest growing cities. The city is Southern China's financial hub, and is headquarters to a high concentration of technology, business service, and manufacturing companies. UPG offers a variety of outsourced print-on-demand services, onsite services, and equipment sales. The company employs 40 people and had year-end revenues of USD $11 million in 2010.

"Shenzhen is a bright spot, even in a vibrant economy like China's," said K. "Suri" Suriyakumar, Chairman, President and CEO of ARC. "While we have moderated our M&A activity in the past several years, UPG is one of a handful of great opportunities to meaningfully grow our market share in China. There are hundreds of technology, financial and business service companies in the area, several of which are already our customers. With UPG joining our team, it helps us consolidate another strategic hub in China and provides an excellent platform on which to expand our business."

ARC and UDS already have a significant operating presence in the Northern and coastal parts of the Chinese mainland with three locations in Beijing and two locations in the industrial hub and port city of Shanghai. Along with the UDS office in Hong Kong, UPG anchors the company in the South. Maintaining a strategic footprint is an important part of ARC's business model as it facilitates the distribution and adoption of the company's outsourced services, improves access to its cloud technology offerings, and consolidates market share.

Henry Shen, General Manager of UPG and one of the company's founders, said, "We're looking forward to working with UNIS and ARC. Their experience, geographical distribution, financial strength and technology expertise are huge advantages we can use to grow our business. We're very excited about becoming a part of the team."

About UDS UDS is a joint venture between U.S.-based ARC, and China-based Unisplendour Corporation Limited (UNIS), the high- technology manufacturer and retailing giant closely associated with Tsinghua University in Beijing. ARC holds a 65% controlling ownership stake in the venture. UDS pairs the digital document management solutions of ARC with the brand recognition and Chinese distribution channel of UNIS to deliver reprographics equipment, document management services, and digital reprographics services throughout China.

About ARC (NYSE: ARC) ARC (American Reprographics Company) (NYSE: ARC), is one of the nation's leading document solutions companies providing business-to-business document management technology and services to the architectural, engineering and construction, or AEC industries. The Company also provides document management services to companies in non-AEC industries, such as technology, financial services, retail, entertainment, and food and hospitality. ARC provides its services through its suite of technology products, a network of hundreds of service centers around the world and on-site at more than 5,500 customer locations. The Company's service centers are digitally connected as a cohesive network, allowing the provision of services to more than 120,000 active customers.

Joel’s comment:

In the Press Release, it mentions that UPG’s has 40 employees and annual revenues (in 2010) of $11,000,000 (USD.) That works out to $275,000 annual revenue per employee, which is an extraordinarily high annual-revenue-per-employee number, even for reprographers in the U.S., where prices and wages are reportedly much higher than in China. In fact, I don’t know of any U.S. reprographer who has ever achieved such a high annual-revenue-per-employee. (I am aware of one U.S. reprographer who came close to that number, years ago, but, sorry, I ain’t gonna say who that was.) Anyway, I’ve been told that wages in China are ultra-low compared to wages in the U.S. If that’s the case, I find myself wondering how in the world a reprographics company in China can generate annual revenues of $275,000 USD per employee. Anyone know how that could be???

1 comment:

  1. About the sales stated in the Press Release for UPG, I received this "correction" notice from ARC management, this morning, via e-mail:

    Hi Joel,

    The UPG sales are 11 mil RMB and not USD . This was a mistake on the press release and the correction has already been sent .