Business

Mebane-based ARCA acquires larger Italian company

Brad Caldwell works on a cash dispensing machine at ARCA's 45,000-square-foot headquarters in Mebane. ARCA's revenue zoomed from $24.3 million in 2009 to $32.6 million last year. The company's machines are used by banks and credit unions to handle cash and dispense bills.
Brad Caldwell works on a cash dispensing machine at ARCA's 45,000-square-foot headquarters in Mebane. ARCA's revenue zoomed from $24.3 million in 2009 to $32.6 million last year. The company's machines are used by banks and credit unions to handle cash and dispense bills. cliddy@newsobserver.com

ARCA, a fast-growing producer of cash-handling machines, is expanding into new markets and enhancing its manufacturing and research-and-development capacity by acquiring an Italian company.

Privately held ARCA, which is headquartered in Mebane, announced last week that it was acquiring virtually all of CTS Group, a company with significantly more employees and slightly more revenue.

Buying CTS, which has long been its supplier of cash recycling machines used by banks and credit unions, will boost ARCA’s workforce by more than 400 people – pushing it from 120 workers to more than 500.

Financial terms of the deal weren’t disclosed.

“It’s a whole new chapter in our story,” said Aubrey Meador, ARCA’s president.

A key driver in the acquisition was a desire “to secure our supply chain,” Meador said. “This company was a key supplier to ARCA. So much of our revenue was based on their products that we really wanted to control the source.”

ARCA, whose top-selling products are its cash dispensers and cash recyclers, has been on the fast track. The company, founded in 1998 by CEO Mort O’Sullivan, made Inc. magazine’s list of the nation’s 5,000 fastest-growing private companies in seven of the past eight years. Last year its revenue totaled $60.2 million, up from $21.8 million in 2010.

Meador declined to disclose ARCA’s anticipated 2014 revenue other than to say it will be higher than last year – without counting revenue acquired with the CTS deal.

Cash dispensers, which use the same technology as ATMs, are used by banks to give cash to customers in order to boost efficiency by speeding up transactions. Cash recyclers both take in and dole out cash – freeing tellers to engage more with customers and sell them other products rather than counting cash.

Acquiring CTS also gives ARCA other products – including cash deposit systems and check scanners used by retailers. In addition, ARCA only had the rights to sell the cash recyclers made by CTS in North America. Now it can sell them globally.

“So we can apply the same successful sales model (that ARCA uses) here in other places,” Meador said. ARCA has been selling the CTS cash-recycling machines under its own name as well as supplying them to other companies that sell them under their own brands.

The acquisition also should enable ARCA to accelerate the development of new products that it has in its pipeline.

CTS is “more of an R&D company and we are more of a customer-facing marketing and sales company,” Meador said.

More than 200 CTS employees, the bulk of whom are based in Italy, are engineers focused on designing products.

The CTS acquisition follows on the heels of ARCA’s announcement last January that it would shift more production of its cash-recycling machines from CTS operations in Italy to Mebane. That was accomplished by negotiating a deal with CTS that called for it to provide modules that were assembled in Mebane.

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