Marco Expands Reach into East Coast with Phillips Acquisition

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Yesterday, St. Cloud-based Marco of St. Cloud, Minnesota, reported that it had acquired Phillips Office Solutions, which is based in Lower Swatara Township, Pennsylvania, for an undisclosed sum.

“This is the next phase of our national expansion,” Marco CEO Jeff Gau told the Business Journalon Tuesday.

Marco was founded in 1973 and has been expanding throughout the Upper Midwest. It has 61 offices and expects to do more than $400 million in revenue this year. Phillips Office Solutions, Marco’s largest acquisition to date, will do about $38 million this year.

The plan is for Phillips to serve as the East Coast hub for Marco, Gau said. Marco is retaining the entire Phillips workforce — 140 people — and promoting Phillips President Bill Shuey to regional president of copier and enterprise content management (ECM) solutions.

The co-owners of Phillips Office Solutions, brothers David and Peter Phillips, are planning to retire, said Peter Phillips, the company’s president and CEO.

According to the Business Journal, Marco, which is owned by a Minnesota-based investment firm, has been growing rapidly for more than a decade. The company has made 10 other acquisitions over the past two years and more than 40 since 2005, pushing its employee count to nearly 1,400.

Marco’s Gau told the Business Journal that “Marco intends to remain a strategic buyer in the document management industry and will use the Phillips deal as a springboard for future East Coast acquisitions.”

“We will expand out there through Phillips,” he said. “Acquisitions are part of our strategy.”

According to the Business Journal:

“Ahead of the Marco deal, the Phillips family sold off their Phillips Workplace Interiors division to senior management. The Phillips name will remain on that company as the new owners look to expand to a new facility. Phillips Workplace Interiors specializes in the corporate, education and health care markets.

The furniture company’s future move out of the Fulling Mill Road facility, which is owned by the Phillips family, will free up space for Marco to add employees. Shuey said a big focus will be expanding the IT services side of the business.”

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