Reprographics 101

If you bought 100% of SPS, it’d be like paying a purchase price of 16.34% of Sales Revenues.

If you bought 100% of ARC, it’d be like paying a purchase price of 48.94% of Sales Revenues.

I know, I know, I know … both have debt and debt is a consideration (but, I’m too lazy to look back at SPS’s debt picture.)

But, still, I can remember “the days” in the reprographics business where you could purchase reprographics companies for 50% of Sales Revenues – and sometimes for less than that. But, as time went on, some reprographics companies sold for more than 100% of Sales. There was a time when ARC, itself, was valued at more than 250% of Sales.

Referring to the table below:

I’ve used a EURO to $USD exchange rate of 1.43 to convert SPS’ numbers from Euros to US Dollars.

I’ve “annualized” both company’s 2011 Sales simply by multiplying their first half 2011 Sales by a factor of 2.

It’s interesting, I think, that SPS is, on a Market Cap as a %age of Sales basis, valued at 2/3rds less than ARC