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American Reprographics Acquires RCMS Group

Wednesday, October 14, 2009

Press release from the issuing company

WALNUT CREEK, CA -- American Reprographics Company, the nation's leading provider of reprographics services and technology, today announced that it has acquired certain assets of RCMS Group, LLC, a highly respected technology services provider in the building information modeling (BIM) market. RCMS specializes in providing three-dimensional modeling and analysis of commercial construction projects on an outsourced basis. The firm focuses on improving business processes for construction professionals in every segment of the AEC industry. Terms of the acquisition were not disclosed.

BIM involves the use of specialized software and analytical expertise to represent buildings and building components in three dimensions on a computer screen. Using various modeling techniques, BIM users build their projects "virtually" in a computer model prior to actual construction. Advantages include increasing the accuracy and speed of bidding, planning workflow, project costs and schedules, and identifying conflicts long before they are encountered in the field.

"RCMS is a perfect strategic fit for ARC," said K. Suri Suriyakumar, Chairman, President and CEO of American Reprographics Company. "The construction industry is experiencing a substantial increase in the adoption of BIM technology, and the current economic environment will only accelerate its use given how much BIM improves efficiency and reduces building costs. We can scale RCMS's service offering using our national platform and leverage the data we host in PlanWell across the country. From a business perspective we can realize the synergies immediately, and the technology service offering to our customers is enormously compelling."

Management noted that both companies address a common customer base and use the same kind of drawing files as the bases of their businesses. RCMS can leverage ARC's content to build its models, and thus increase its value to customers. RCMS already shares several large clients with ARC including Whiting-Turner and Gilbane Building Company. ARC also noted that while its traditional reprographics company acquisitions remain on hold until the economy begins to recover, RCMS represented a strategic opportunity to extend its line of technology services with little risk.

K.P. Reddy, the founder of RCMS, joins ARC as the Vice President of BIM Services, and has been tasked with growing a dynamic $2 million consultancy practice into an enterprise-level business capable of serving ARC's national customers while leading the BIM strategy for ARC.

"K.P. has built RCMS into a well-respected technology services company with a deep understanding of the business advantages of BIM," said Mr. Suriyakumar. "His expertise will add tremendous value to our technology offerings and should help us broaden our technology revenue streams in the future."

Mr. Reddy founded RCMS Group in 2002 to help improve building processes in the AEC industry with BIM-related technology. Prior to founding RCMS, Mr. Reddy was Chief Information Officer and Vice President of Verso Technologies, Inc. In 2009 Mr. Reddy was named as an Adjunct Professor to the Georgia Institute of Technology College of Architecture-Building Construction. He is a frequently requested speaker and panelist on BIM-related topics for organizations ranging from the American Institute of Architects (AIA) and Associated General Contractors of America (AGC), to the Construction Specification Institute (CSI), among others. He is also a BIM task force member of the National Council of Architectural Registration Boards. Mr. Reddy graduated from the Georgia Institute of Technology in 1994.

"Using BIM is becoming a necessity in construction," said Mr. Reddy. "By offering an outsourced BIM solution to ARC customers, we can dramatically reduce their costs, while delivering the critical decision support data, risk mitigation, and building process improvement that come from using the technology. For a customer base that generally prefers a project-based cost model, it's an ideal way to amortize the adoption of BIM throughout their business and a huge value-added solution ARC can offer throughout the country. I look forward to driving the initiative forward and increasing the value of ARC's offering in the AEC industry."

More About BIM: The use of BIM technology improves the building process for owners, developers, designers, engineers and construction companies. In "The Business Value of BIM," a study completed by McGraw-Hill Construction in 2009, key findings include:

    * Half of the industry is using BIM or BIM-related tools today -- a 75% increase in usage over the past two years.
    * One-third of all users utilize BIM on 60% or more projects today, but twice as many expect to be using it at that level in two years.
    * 42% of non-users believe that BIM will be highly or very highly important to the industry in five years.
    * One in five users who formally measure ROI see returns above 50%.
    * 9% of users who formally measure ROI see returns above 100%.
    * Gaining BIM capabilities and expertise requires investments in a broad range of products and processes. Contractors are the most likely to see a need to focus on nearly all areas of investment, today and five years from now.




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