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American Reprographics Company Business Information, Profile, and History

700 North Central Avenue, Suite 550
Glendale, California 91203

Company Perspectives:

Our objective is to continue to strengthen our competitive position a s the preferred provider of business-to-business document mana gement, document distribution and logistics, and print-on-dema nd services.

History of American Reprographics Company

American Reprographics Company (ARC) is the largest reprographics com pany in the United States, providing document management services to architectural, engineering, and construction firms, as well as to com panies involved in financial services, retail, entertainment, and foo d and hospitality. Reprographics services generally include digital m anagement and reproduction of construction documents and other graphi cs-related material. ARC's proprietary "PlanWell" software is an Inte rnet-based solution that enables architects, engineers, and other con struction professionals to view plans and submit bids online. ARC sel ls PlanWell to its customers and licenses the software to independent reprographers. The company also operates "PEiR" (Profit and Educatio n in Reprographics), a program that provides purchasing, technology, and educational material to other reprographers. ARC operates more th an 180 reprographic centers in 141 cities in 30 states. The company a lso operates four service centers in the greater Toronto metropolitan area and one in Mexico City. ARC expands by acquiring small, local r eprographics firms, typically retaining management and the name of th e firms after they are acquired.


For more than 30 years, ARC's predecessor led a quiet, unassuming exi stence, never showing a sign of becoming the aggressive consolidator that later stood atop its industry. The dramatic change in purpose an d strategy that transformed a modestly sized, locally oriented busine ss into a national giant came after new owners and new management ass umed control over the company. Sathiyamurthy "Mohan" Chandramohan and his childhood friend Kumarakulasingam "Suri" Suriyakumar were the in dividuals responsible for spearheading the transformation, two Sri La nkan natives who changed the face of the U.S. reprographics industry. Chandramohan came from a background in banking and retail, spending his professional career in Sri Lanka at the Hong Kong and Shanghai Ba nking Corporation before joining U-Save Auto Parts Stores in 1981, wh ere he rose to the positions of chief operating officer and chief fin ancial officer during a seven-year stay. Suriyakumar's Sri Lankan yea rs were spent at Aitken Spence & Co. Ltd., a conglomerate that ra nked as one of the country's five largest corporations. Although Aitk en Spence's diverse business activities required Suriyakumar to work in several different capacities, the majority of his time was spent i n shipping and freight-forwarding.

Before Chandramohan and Suriyakumar began their assault on the reprog raphics industry, the company they used to launch their assault opera ted as one of thousands of small reprographics firms populating the n ation. ARC was founded as a sole proprietorship in 1960, beginning as a single storefront in Los Angeles that operated under the name Ford Graphics. In 1967, the company was dissolved and a new corporate str ucture was established, marking the birth of Micro Device, Inc., whic h continued to provide reprographics services under the Ford Graphics banner. Over the course of the next 20 years, Micro Device expanded, but not by much, adding another shop by the time Chandramohan joined the company in 1988 as president. Suriyakumar joined his friend the following year, accepting the post of vice-president. Suriyakumar's a rrival coincided with the owner's decision to retire, which prompted the two Sri Lankans to acquire the company's assets. Micro Device, wi th two stores and $9 million in annual revenue in 1989, was much like the type of company Chandramohan and Suriyakumar would spend the next 15 years aggressively acquiring, with each acquisition represen ting a building block that eventually formed the industry's leader, A RC.

Although Micro Device increased in size by a factor of 75 during the 1990s, the acquisition campaign that delivered such startling growth did not begin immediately after Chandramohan and Suriyakumar acquired the company. Unfortunately for the two new owners, their purchase wa s completed just before recessive economic conditions settled in, scu ttling any plans for expansion and placing a premium on squeezing any profit they could out of the business. The two partners later put a positive spin on their first years in control, claiming that the blea k economic conditions gave them time to learn the reprographics busin ess. Once the economic climate improved, the new owners began to make their first acquisitions, using what Suriyakumar, in a February 2, 2 001 interview with the San Francisco Business Times called "ve ry creative financing."

Micro Device's acquisitive activity, which intensified later in the d ecade under the ARC name, was designed to consolidate a highly fragme nted industry. According to the International Reprographics Associati on, the market generated $5 billion in annual revenues, a total c ollected by roughly 3,000 relatively small reprographics firms. A typ ical firm employed 20 to 25 workers, generated $1.5 million in an nual revenue, and was privately owned, usually by the founders of the firm. Chandramohan and Suriyakumar planned to build on their base in California and create the industry's first nationwide competitor, a company that would serve as an umbrella organization for the scores o f small firms dotting the country, giving each member of their family the benefits of operating within a greater whole and access to techn ology unique to their company. Almost without exception, Chandramohan and Suriyakumar retained the management of each acquired company and kept the name of the firm, cobbling together a collection of locally branded firms that to the unknowing eye appeared to be independent.

ARC Launching an Aggressive Acquisition Campaign in 1997

After establishing a small base of operations with "creative financin g," Chandramohan and Suriyakumar turned to traditional bank loans to fund the expansion of their company. The scope of their acquisition c ampaign widened considerably after they refinanced the company in 199 7, a recapitalization effort that involved changing the corporate str ucture of the company to a California limited liability company, whic h took the name American Reprographics Holdings, LLC. The change in s tructure and name coincided with a $15 million investment by TZS Capital, which gave Chandramohan and Suriyakumar the capital to accel erate their acquisition program. After the deal was completed, Chandr amohan and Suriyakumar owned 50 percent of the company, while outside investors owned the other half.

After the investment by TZS, the company began to record strident gro wth. By 1998, the company's annual revenues had increased to $140 million, a total that leaped to $223 million in 1999 when the co mpany completed 20 separate acquisitions, half the number of acquisit ions completed during the 1990s. The supply of capital available for acquisitions received another infusion in February 2000, when the Chi cago-based investment firm Code Hennessy & Simmons LLC acquired T ZS Capital's 50 percent stake. Code Hennessy, which managed more than $1 billion in investments, provided Chandramohan and Suriyakumar with $82.5 million to continue their buying spree. After complet ing 20 acquisitions in 1999, they purchased 14 reprographic firms in 2000, including their largest acquisition up to that point, Houston, Texas-based Ridgway's Inc. in September 2000. Ridgway's, which was ac quired for $100 million, was the second largest reprographics com pany in the country with $70 million in annual revenue and 22 loc ations in the southern and eastern United States.

The acquisition of Ridgway's represented a major step toward national dominance, bringing ARC's closest rival into its network, but the ac quisition was an anomaly because of its size. The company's growing n ational presence was built almost entirely by purchasing reprographic s firms with between $3 million and $5 million in annual reve nues, companies that were a fraction of Ridgway's' size. "The compani es we acquire have a stranglehold on the local market," Suriyakumar e xplained in a February 2, 2001 interview with the San Francisco Bu siness Times. "And they are very strong in that way because we ch ose companies that have built up customer bases," he added. "What we do is figure out a way to let them operate as separate companies unde r their current ownership, so that the strong locality does not suffe r under the larger corporate identity." A more typical example of the company's acquisition strategy was a firm purchased one month after Suriyakumar spoke with the San Francisco Business Times. The c ompany acquired Rhode Island Blueprint, a supplier of reprographics p roducts and services with 17 employees and $3 million in revenues . Rhode Island Blueprint's president and founder, Peter Morn, reacted to the deal in much the same way other owners and operators responde d after joining the ARC network. "There won't be any changes to the o peration or employees," he said. "Joining ARC opens new competitive t echnological advantages for us." For Rhode Island Blueprint, as it wa s for the dozens of firms gathering under the ARC umbrella, it was bu siness as usual after joining the network, but with benefits of being part of a national organization.

By the time Rhode Island Blueprint was acquired, Chandramohan and Sur iyakumar were striving to reach $500 million in sales by the end of the year. They fell short of the $500 million mark, and failed to reach the financial goal for the next three years, but the statur e of the company was no less impressive. They spent $32.6 million on acquiring 14 reprographics firms in 2001, helping to lift revenue s to $420 million. By this point, the firms that were joining the company were benefiting from more than just ARC's financial resource s and managerial support. In June 2000, the company launched PlanWell , the "technological advantage" Peter Morn referred to after becoming part of the ARC family. PlanWell was web-based software that offered a "planroom-to-print" solution to the firms operating under ARC's co ntrol, enabling architects, engineers, and other construction profess ionals to view plans, submit bids, and purchase reprographics service s via the Internet. Initially, PlanWell technology was only available to firms operating under the ARC umbrella, but in 2003 the company b egan licensing the technology to independent reprographers, the same year the company started PEiR (Profit and Education in Reprographics) . PEiR was a trade organization through which the company charged mem bership fees and provided purchasing, technology, and educational ben efits to reprographers.

ARC inched toward the $500 million in annual sales as it entered the mid-2000s, continuing to add reprographics firms to its ever expa nding network. After spending $34.4 million for eight reprographe rs in 2002, the company purchased four firms for $870,000 in 2003 and six firms for $3.7 million in 2004. By the end of 2004, the company had completed 86 acquisitions since 1997, giving it a total o f 181 locations in 30 states. As a low-cost way to complement its exp ansion via acquisitions, the company opened 30 branch offices in 2004 and planned to open 12 more locations in 2005.

Public Debut in 2005

ARC maintained a dominant market position midway through the decade, standing as the only nationally oriented reprographics company in the country. The company controlled more than five times as many service locations as its closest rival and maintained a presence in eight ti mes as many cities as its nearest competitor. Chandramohan and Suriya kumar decided to sell the company's stalwart position on Wall Street, both as a way to gain access to capital and to allow private investo rs to cash out on their investment. They filed for an initial public offering (IPO) of stock in December 2004, reorganizing American Repro graphics Holdings, LLC as a Delaware corporation named American Repro graphics Company in preparation for the IPO. The company completed it s IPO in February 2005, raising $174 million. With the proceeds f rom the stock offering, Chandramohan and Suriyakumar were expected to continue their acquisition campaign and build on their already consi derable lead in the industry. In the years ahead, there was every exp ectation that the ARC organization would factor as the preeminent com petitor in the reprographics industry.

Principal Subsidiaries: American Reprographics Company, LLC.

Principal Competitors: Service Point Solutions, S.A.; Thomas R eprographics, Inc.; ABC Imaging, LLC; National Reprographics Inc.


  • Key Dates:
  • 1960: Predecessor Ford Graphics opens a store in Los Angeles.
  • 1967: Micro Device, Inc. is formed to take over the business o f Ford Graphics.
  • 1989: Micro Device is acquired by Chandramohan and Suriyakumar .
  • 1997: An investment by TZS Capital touches off an ambitious ac quisition campaign for Micro Device, which changes its name to Americ an Reprographics Holdings, LLC.
  • 2000: Code Hennessy & Simmons acquires TZS Capital's stake .
  • 2005: American Reprographics Company completes its initial pub lic offering of stock.

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