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Troy, Michigan, May 28, 2002 |
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Allegra Network® LLC, jumped from fifth
to second largest printing franchise in the world in systemwide
sales after the organization's acquisition of Insty-Prints®,
Inc. this year. The execution of the company's acquisition growth
strategy affirms Allegra Network is at the forefront of the
industry's massive consolidation trend.
The acquisition of Insty-Prints expands the company's geographical
reach to more than 500 locations in North America, Poland
and Japan and systemwide sales of $306.9 million (2001) and
marks the third acquisition Allegra has completed in the last
seven years. In 1995, Allegra acquired Zippy Print, a Canadian
franchise printing company and in 1998, the company acquired
the franchise agreements of Quik Print and Instant Copy centers
from XYAN, Inc.
Allegra Network's recent acquisition successes come during
a period of rapid industry consolidation. In 1989 there were
26 franchise organizations in the industry; in 2001, that
number dropped to just 14, according to Karen Lowery Hall,
senior contributing columnist for Quick Printing Magazine.
The number of individual locations in the franchise sector
also has been steadily decreasing for several years; 229 shops
in 2001 were closed - representing a 6% decline from the previous
year. In 2000, there were nearly 32,000 commercial printers
in the United States. By 2010, it is projected there will
be only 23,500 (a 26 percent decrease), according to TrendWatch,
a leading industry research and consulting firm. However,
as the number of locations decline, industry sales continue
to climb. Due to industry growth and emerging market and technology
forces, printing continues to grow at 3-5% per year, with
newer capabilities such as full color digital printing and
variable data services growing at 10-30% per year. Printing
is the nation's third largest manufacturing industry attributing
to more than $160 billion (2001).
"Our acquisition growth strategy has helped put us in
a leading position in our industry," President and CEO
Bill McIntyre commented. "Our increased size provides
us with the leverage to bring more value to all of our franchise
members in the areas of marketing, technology and national
vendor contracts."
In addition to the organization's successful corporate acquisition
growth strategy, Allegra Network has demonstrated
tremendous stability and growth opportunity for its franchise
members. In 1995, the company created the Acquisition
Program for its franchise members to enhance the value of
their business through the completion of a successful
acquisition. The program assists franchise members in identifying
suitable independent printing businesses to
purchase and guides them throughout the entire purchasing
process. Since the program was established, Allegra Network
has completed 117 acquisitions contributing to more than $36
million in incremental sales.
"Acquisitions are one of the quickest ways to build sales
and profitability," commented Darryl Buchanan, vice president
of franchise development. "It is important to take advantage
of the industry's consolidation
as well as the many benefits acquisitions offer." Statistics
show that Allegra Network members who completed
an acquisition kept 74% of their acquired sales at the end
of 12 months. In addition, those members also raised their
sales 34% one year after completing an acquisition when compared
to sales one year prior to an acquisition. Franchise
members who completed an acquisition have also kept 79% of
their acquired sales and have raised their total sales
45% two years after doing an acquisition when compared to
sales one year before doing an acquisition.
Franchise members also agree that completing an acquisition
brings many growth opportunities. Allegra Print &
Imaging Owner Ray Buening boosted his business from $738,000
to $1.2 million after the completion of an
acquisition. Ray commented, "The Acquisition Program
is a very simple and easy way to identify print companies
that are interested in selling their business. There was very
little time required on my part to get started; the
experienced personnel and equipment acquired greatly enhanced
the service and capabilities we offer to our
customers."
Despite a weakened economy presenting hard times for many
businesses, Allegra Network's estimated sales per shop
of $567,000 marked a 3.3 percent boost from last year's figures.
"In a difficult economy, it is especially important
to provide our franchise members with the programs and support
necessary to grow their businesses," commented Bill McIntyre.
"The Acquisition Program creates additional
opportunity for them to do so."
Allegra Network ranks in the top 200 in sales among all
franchise companies worldwide and is celebrating its 25th
anniversary in franchising this year. Allegra Network members
specialize in full-service print and graphic communications
and include Allegra Print & Imaging, American Speedy Printing
Centers, Insty-Prints, Quik Print, Speedy Printing
Centers, and Zippy Print. The company's principal shareholders
include members of Allegra Network management and Domino's
Pizza founder and former CEO Thomas S. Monaghan.
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