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Electronics life cycle management company Intechra continues to expand its national reach through strategic acquisitions.

DeAnne Toto October 25, 2007

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According to Merriam-Webster, the most common definition of "integrity" is "firm adherence to a code of especially moral or artistic values: INCORRUPTIBILITY." However, the word can also mean "an unimpaired condition: SOUNDNESS" and "the quality or state of being complete or undivided: COMPLETENESS."

When handling the high-risk electronic assets of Fortune 500 companies, "integrity," in all of its assorted definitions, is an important selling point.

Electronics life cycle management company Intechra, based in Jackson, Miss., has taken each of these definitions into account throughout its development. The company, which provides a range of services that includes remanufacturing, remarketing, recycling, redeployment, deployment, transportation and warehousing, has successfully achieved a national presence through strategic acquisitions. Intechra has operations centers in Casa Grande, Ariz.; Columbus, Ohio; Dallas; Hartford, Conn.; Los Angeles; Merrimack, N.H.; and Phoenix, with recycling occurring at the company’s Casa Grande and Los Angeles facilities.

While each operations center has a logistics hub, Intechra also operates logistics centers in 12 U.S. cities (See "At a Glance" sidebar, p. 134, for locations.), which help the company provide a secure chain of custody to its clients.

NOT JUST A NAME. "The one thing that is universally paramount in this business is integrity," Chip Slack, Intechra CEO, says, adding that this is the reason the company has the name it does. "We are asking companies to entrust high-value, high-risk assets to us. In a sense, we are asking them to entrust a part of their reputation to us," he says. "We are very intent and deliberate about ensuring that we are environmentally responsible and provide the highest levels of security."

Slack says Intechra’s clients can see the company’s commitment to security when they visit any of the company’s locations, where they are greeted by metal detectors and security guards. The company also provides clients with

Fla
CEO Chip Slack

auditable reports and fully indemnifies them from data security and environmental risks.

The company’s name dates back 2004, when a group of investors purchased computer refurbisher and recycler Resource Concepts Inc. of Carrollton, Texas, renaming it Intechra. The goal was to establish a national solution for unwanted electronics, which the company has achieved largely through a series of strategic acquisitions that began in 2005 when Intechra merged with Columbus, Ohio-based RetroBox. In 2006, Intechra purchased Arizona-based Gold Circuit Inc., an electronics recycler with plants in Chandler and Casa Grande. The company merged Gold Circuit’s Chandler plant into its existing Phoenix facility, keeping the Casa Grande location to handle the shredding and processing of end-of-life electronics. In early 2007, Intechra purchased EPC of Los Angeles, Market2Market of Columbus, Ohio; and SpaceFitters of

AT A GLANCE: INTECHRA

Leadership: CEO Chip Slack (pictured at right), President Jim Campbell, Chief Financial Officer Marion Gray and Senior Vice President of Sales Dave Ryan

Headquarters: Jackson, Miss.

Operations Centers:

Casa Grande, Ariz.: Size (Sq. Ft.): 72,000

Pounds Recycled Per Month: 5 million

Columbus, Ohio: Size (Sq. Ft.): 283,000

Assets Processed Per Month: 100,000

Dallas: Size (Sq. Ft.): 153,000

Assets Processed Per Month: 100,000

Hartford, Conn.: Size (Sq. Ft.): 85,000

Assets Processed Per Month: 60,000

Los Angeles: Size (Sq. Ft.): 80,000

Pounds Recycled Per Month: 3 million

Merrimack, N.H.: Size (Sq. Ft.): 48,000

Assets Processed Per Month: 15,000

Phoenix: Size (Sq. Ft.): 100,000

Assets Processed Per Month:75,000

Assets Processed Per Month: 350,000

Pounds Recycled Per Month: 8 million

Logistics Centers: Atlanta; Austin, Texas; Baltimore; Chicago; Dallas; Durham, N.C.; Houston; Oklahoma City; Orlando, Fla.; Sacramento, Calif.; Seattle; Tulsa, Okla.

Revenues: More than $100 million per year

Employees: 680

Hartford, Conn., from Chasm Holding Corp., further extending its national reach. More recently, the company completed an acquisition of asset management and recovery services firm Lifecycle Business Partners, with operations in New Hampshire and North Carolina, and BCS Logistics, which enabled Intechra to launch a national logistics network to complement its electronics life cycle management services.

Slack says that Intechra has maintained a focus on security and environmental responsibility in its pursuit to establish the national scale required to meet the needs of its corporate clients.

"We’ve made some strategic moves over the past two years to make sure we have the size and scale to handle any company’s assets, we have the geographic reach to make it attractive from a cost standpoint and we have the breadth of services and expertise to be second to no one in quality."

Intechra’s strategy and an emphasis on developing best practices have helped it become a leader in the largely fragmented electronics recycling industry. "With a 20-year history, we have developed a number of what we believe are best practices for this industry," Slack says. "We have developed a variety of practices that set us apart—serialized reporting, indemnification, online commerce for employee purchase programs and nonprofit donations are a few." He adds, "The customization of our equipment, the fact that we make ISO certification a priority for all of our facilities, the procedures and processes we use to ensure zero landfill for the electronics we receive are other examples. In addition, we believe our national logistic network will clearly set us apart. This will give our clients a secure chain of custody that no one else has been able to provide satisfactorily."

FROM A TO B. Slack says he believes Intechra’s acquisition of BCS Logistics will result in obvious benefits for Intechra as well as for the company’s clients. "By handling logistics internally, we are more closely controlling the security of assets and raising the bar on quality of service," he says. "With an initial fleet of 25 vehicles—ranging from vans to box trucks to full tractor trailer rigs—we are able to handle assets for virtually any size company. We also have a national network of 19 logistics centers that complement the national footprint of our processing and recycling centers. We have the advantage of being able to route to the closest facility."

Intechra also employs GPS technology to track the movement of its vehicles, ensures full documentation of the assets it transports and employs fully trained employees who have undergone extensive background testing, according to Slack.

"The real difference is that we are offering a single, secure chain of custody for IT assets, with full-time logistics security specialists trained to handle IT assets and help clients manage the packing, scheduling and shipping," he says. "The expertise we gained through BCS will be noticeable."

Logistics play an integral role in the asset disposition process at the start of every job. Intechra arranges for the transportation of its clients’ assets, using its own logistics network 80 percent of the time, according to Slack.

If required by the contract, hard drives may be punched on site using a piece of mobile equipment that punches a hole in the drive as well as bending the platter, which Slack says is more secure than just punching a hole through the drive. Once the devices are at an Intechra facility, they are barcoded with an asset ID number, which is used to track the overall asset and its components.

If an asset has market value, it will be remarketed. If it does not have value as a whole unit, technicians will extract the valuable parts for remarketing. Valueless assets are recycled. Slack says nearly 30 percent of incoming assets can be remarketed, while the remaining 70 percent must be recycled.

Intechra’s proprietary software-based tracking system records processing activity by the asset ID, assuring the company fulfills the terms of its various contracts. Slack says the software is able to track large numbers of contracts with a number of variables across all of the company’s facilities.

When it comes to hard drives, he says most of Intechra’s customers feel secure with the company’s data overwriting process, which uses Blancco software. However, Slack adds, many organizations in the health care industry often require destruction of hard drives. Intechra uses a quality control process that includes randomized internal audits as well as external audits to ensure that hard drives are properly sanitized. The company also invites its customers to perform random audits of their hard drives.

Intechra has standardized these practices throughout the operations that it has acquired, but successfully integrating various distinct corporate cultures goes beyond ensuring adherence to the company’s policies and procedures.

INTEGRATION EXPERTISE. "Each of our acquisitions has responded to a strategic need," Slack says. "RetroBox helped us gain necessary scale. EPC and Gold Circuit helped us significantly build our recycling capacity and helped us more closely control the waste stream. SpaceFitters was key in helping us gain the right geographic reach and continue building scale and capacity. BCS Logistics and Lifecycle Partners brought us new logistics expertise, which is a tremendous differentiator, and helped further round out our geographic presence and increase our enhanced asset security." He adds, "None of our acquisitions has been simply for the sake of growth. Each has been strategically targeted to fill a gap, build necessary capacity, add new service or bolster our ability to set the standard for data security and environmental responsibility."

OPPORTUNITY KNOCKS

"Market conditions for reputable national electronics life cycle management firms are excellent," Chip Slack, CEO of Intechra, Jackson, Miss., says.

According to Slack, a number of factors have helped to create a favorable market for electronics life cycle management firms like Intechra.

"Data security requirements of Sarbanes-Oxley, the Graham-Leach-Bliley Act and HIPAA (Health Insurance Portabilty and Accountability Act) have made companies more cognizant of the need to be careful and deliberate in the way they discard old electronic equipment.

"The ‘green wave’ is everywhere—people are serious about protecting our environment, and there is growing concern about the way hazardous materials in used electronic equipment have been allowed to be thrown into landfills," Slack continues. "Environmental regulations are also on the increase, which creates yet more impetus for companies to be responsible in the way they get rid of their used electronic equipment."

Finally, he says, "Businesses are unsure of what to do with old electronic equipment. IDC recently published a report indicating that 17 percent of companies are still getting rid of their old electronics by throwing it in the trash."

With an emphasis on growth through acquisition, Intechra has had to become adept at integrating firms with potentially dissimilar cultures, ensuring that all employees share the same vision and mission.

"One of the things that I’ve learned over the years is that you absolutely cannot let integration efforts disrupt the service you provide your existing clients," says Slack, who first became acquainted with merger integration and business investment analysis when he worked for First American Corp., Nashville.

As no two integrations are alike, Intechra does not have a prescribed time frame in mind at the outset of an acquisition. "We do extensive integration planning so we can be sure we get the execution right," Slack says, "and the length of time it takes depends on the complexity of bringing the companies together."

Intechra has a dedicated team that works to integrate the company’s operational, IT, facility security, human resources and financial sectors with those of its newly acquired companies. "Our end goal is a transparent operation where clients know their assets will go through the same secure and environmentally responsible process regardless of the facility," Slack says.

FUTURE GROWTH. Intechra continues to define its own history as well as the direction of the electronics recycling industry, and growth is very much on Slack’s mind. "With changing technology and the need for more frequent refreshes by companies, with more knowledge of the environmental hazards in electronic equipment, there will continue to be significant growth in the electronics waste stream," he says.

"We do anticipate the need for additional recycling capabilities, given the current legislative environment and growth opportunities in the industry, Slack says.

Intechra is also contemplating global growth opportunities. According to Slack, the company is employing the same strategic approach it took in growing its domestic capacity, analyzing its customers’ needs and economic issues before coming to a decision about which international markets merit investment.

This feature originally ran in Secure Destruction Business magazine, a Recycling Today Media Group publication. The author is editor of SDB magazine and can be reached at dtoto@gie.net.

 

 

 

 

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