| Home > Portfolio > Case Studies > American Reprographics Company |
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Glendale, California
High-quality, digital, on-demand, short-run reprographic services
Investment Date: March 2000
Exit Date: March 2007
www.e-arc.com |
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American Reprographics Company (NYSE: ARP) was already the nation’s largest and fastest growing provider of outsourced reprographics when the company came to CHS’ attention. In the three years prior to our investment, ARC had completed approximately 40 acquisitions and invested heavily in digital technologies to become the preferred national provider of business-to-business document management, document distribution and logistics and print-on-demand services.
Like other CHS investments, ARC offered an opportunity to consolidate a highly fragmented and growing industry. We anticipated that ARC’s development of a national footprint with regional expertise would provide significant purchasing power, the ability to invest in industry leading technologies and the resources to service large, national customers. ARC was a recapitalization transaction wherein CHS acquired a 50% interest alongside a proven management team. CHS entered this arrangement carefully, negotiating detailed governance provisions with springing control for CHS in the event that ARC underperformed.
CHS’ role with ARC was to coach management through its transformation from an entrepreneurially run business into a public company. Working with the management team, we assembled a board of directors with extensive public company experience and implemented formal budgeting, tracking and reporting systems across the company’s 177 reprographics service centers. We also implemented other public company disciplines including an audit committee and an internal audit function. In addition, we helped ARC negotiate and close 53 additional acquisitions, including the acquisition of ARC’s then largest competitor, and refinanced or amended ARC's credit facilities on multiple occasions to optimize ARC’s financing structure and facilitate its acquisition strategy.
We also supported management’s investment in PlanWell™, a proprietary suite of internet-based technologies which create a seamless capability to document, store, manipulate, retrieve and print construction documentation. ARC’s goal was to promote PlanWell™ to become the industry standard for digital document management and online procurement of reprographics services.
In February 2005, these efforts resulted in an initial public offering of ARC’s common stock. Goldman Sachs and JPMorgan co-led the IPO.
In March 2007, CHS sold all of its common stock in ARC. ARC executed a secondary offering co-led by JPMorgan and Goldman Sachs. |
Case Studies have been selected for illustrative purposes. The specific portfolio companies identified are not representative of all active or prior CHS Capital portfolio companies;
results may not be typical and it should not be assumed that investments in other portfolio companies will be or were as profitable. For complete listings of active and prior
portfolio companies please visit the "Portfolio" section of the website. Investments in a fund involves significant risk, including loss of the entire investment.
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