Rogers-based Archway acquired in $300M deal

Fast-growing Archway Marketing Services of Rogers, Minn., was acquired Monday by the international firm Investcorp in a $300 million deal that Archway executives intend to leverage into more growth.

Clay Perfall, Archway chief executive, said the transaction will give the marketing and fulfillment services company the wherewithal to double its nearly $300 million in sales within the next five years.

"We are very excited about our new partners," Perfall said in a telephone interview. "They bring financial resources, business acumen and relationships."

Archway has 1,800 employees in the United States and Canada, 400 of whom work in Minnesota.

Archway handles behind-the-scenes shipping of products and sales materials for retail and pharmaceutical firms, delivering marketing materials to stores and drug literature to pharmaceutical sales representatives. It also runs gift card programs for restaurants and retailers.

"Over the past four years, despite economic headwinds, Archway has more than doubled in size, broadened its service offers and emerged a leader in the marketing logistics and fulfilment industry," Chris McCollum, the managing director of Investcorp, said in a statement. "We're looking forward to partnering with Archway to continue this strong growth and expansion of its leadership position in this growing industry."

Investcorp bought Archway from an investor group that included Tailwind Capital, Black Canyon Capital and executives of Archway.

Perfall said Archway's management team will maintain an equity stake in the company and will retain the current leadership structure with Perfall continuing as CEO. The company's headquarters will also remain in Rogers.

Investcorp, with offices in New York, London and Bahrain is a subsidiary of Bahrain's Investcorp Bank and is publicly traded on Bahrain's stock exchange, the Bourse.

According to a 2011 letter to investors and the company's website, Investcorp has more than $11 billion in assets and last year reported net income of $140.3 million.

The company's biography said it was established in 1982 to give high-net-worth individuals and institutions in the Gulf region investment opportunities in Western countries.

Investcorp targets U.S. and European corporate opportunities as well as investments in U.S. real estate. It also operates global hedge funds.

"Investcorp has a history of doing that," Perfall said. "We have aspirations to become much larger. We need resources to do that."

Earlier this year, Archway acquired an Indiana-based company in the marketing and fulfillment business for an undisclosed amount and in 2009 acquired a Canadian supply chain management firm for $20.6 million.

Perfall said Archway, whose clients include Fortune 500 companies like Target, General Motors and Pepsi, was able to thrive in recent years by investing in people and technology "through the downturn."