Expanding its reach

Not all things go according to the original plan, and in the case of commercial records and information (RIM) management company Access, headquartered in Livermore, California, that is a good thing.

Access CEO Rob Alston says Dennis Barnedt and John Chendo founded the company in 2004 with the goal of building a regional RIM company serving the records management needs of small and midsized businesses on the West Coast.

However, anyone remotely familiar with Access, which was owned by investment firm Summit Partners until the fall of 2014, when Boston-based Berkshire Partners LLC bought a major interest in the company, knows its footprint extends far beyond the West Coast today. Access is the largest independently owned company in the commercial RIM industry and the third largest overall, with nearly 100 locations in 24 U.S. states and 40 major markets. The company has been listed on the Inc. 5,000, which ranks the fastest-growing independent companies in the United States, for six consecutive years, achieving a 235 percent growth rate from 2010 to 2013, when revenue increased from $32.2 million to $108 million.

The growth trend continues today, and Access says it expects to exceed $200 million in revenue in 2015.
 

Growing in scale

Access has gotten to this point by using a strategy in which acquisitions play a pivotal role, having purchased 82 companies over the years.

“Access has now, for over a decade, successfully executed on its multipronged growth strategy through 1) acquisitions of other RIM providers, 2) by adding new clients through traditional sales and marketing efforts, 3) expanding into and adding new services with existing clients and 4) continually investing in our facilities, technology and team,” Alston says.

The company also has established a presence in Latin America, with three locations in Costa Rica, two in Panama and one in Trinidad.

“So, our current international footprint well exceeds our original ‘regional player’ plan,” Alston says.

Access’ international growth was the result of its acquisition of Retrievex in 2012. Retrievex had a location in Costa Rica, and while Access had an offer from another party to purchase this location, Alston says the company decided to evaluate the operation over a six-month period before taking action.

“The business grew 15 percent on an annualized basis,” he says of that original Costa Rica location, noting that this was organic growth, or “boxes having babies,” as he puts it. “That growth was much greater than what we were seeing anywhere else in our portfolio at that time,” Alston adds.

The company decided not only to keep the Costa Rica location it acquired through the Retrievex purchase but also to look for other opportunities in the Latin American market, purchasing two additional locations in Costa Rica as well as operations in Panama and Trinidad.

While Access’ international growth was sparked by its acquisition of Retrievex, Alston says it has been “fueled by the growth we are seeing” in Latin America.

“Latin America has a larger percentage of unvended business in that RIM is still becoming a science there.” He adds that the region is experiencing its first wave of outsourcing for RIM services.

When asked for good examples of investments in time and resources the company has made over its history, Alston points to Access’ acquisition strategy and, in particular, to his investment of time in this area in his former position of executive vice president of corporate development and integration. “I spent an extraordinary amount of time traveling and building relationships with sellers,” he says of that time.

“We really do have a stellar reputation for being a fair acquirer,” Alston adds. “We are the acquirer of choice in the industry right now.”

Regarding Access’ future acquisition strategy, Alston says, “At this point, no geographical area is off limits for the right opportunity. Here in the U.S., we will continue to look for acquisitions in existing markets that we already serve as well as in new markets. Internationally,” he continues, “we’ll focus, for now, on Latin America.”

Alston, a native of Kailua, Hawaii, who joined Access in 2005 when FileMinders of Hawaii, the RIM services company he co-founded and served as director of operations for, was acquired by Access, says the company serves more than 20,000 clients in North and Latin America. “As a private company, we do not share the breakdown by business line, but I can say that our off-site records management business is the largest, and our digital business is growing the fastest,” he says.
 

Keeping things in perspective

“One of the wonderful aspects of this industry is the inherent client diversification,” Alston says. “We service clients in all areas of business—the legal and financial communities, health care, insurance, government, education, automotive and many others. Both the legal and health care segments are extremely active for us.”

He adds that Access is seeing slower growth in the health care segment relative to historical norms, pointing to the adoption of electronic medical records as the primary factor contributing to this slowdown in activity.

“However, a large percentage of the records that we store for health care clients are not medical records,” Alston says, adding that real estate and personnel records are more common.

The shift to digital records like the one occurring in the health care industry is an area that Alston and Access are paying attention to. However, it is not an area of great concern for the company. “It doesn’t worry me, but we are paying attention to it,” Alston says.

He says the trend is occurring more so with enterprise-sized clients rather than with the small and midsize businesses that Access tends to serve. These smaller companies have capital constraints and realize little in the way of major efficiencies from going digital, Alston says.

However, he recognizes that opportunities exist in offering digital services to clients and sees the best solution being a hybrid between physical and digital content management, particularly in the Latin American market. “Our sales pitch in Latin America more heavily involves digital technology than in the U.S.,” Alston says. The hybrid approach is more popular there given the fact that records management is becoming a discipline in the region at the same time this technology is affordable and more readily available, he adds.

In the area of digital information management, the company offers hard-copy conversion, scan-on-demand and Web-based document management, noting that digital records “can help increase productivity, security, service and compliance while reducing costs.”

Access says it partners with leading technology providers to offer a range of digital records management solutions.

In addition to digital information management, the company’s suite of RIM solutions includes records storage, secure destruction, data protection, information governance and information security compliance.

“We are seeing significant growth opportunities through our acquisition strategy, the addition of adjacent services, like our Data Breach Reporting Service (in partnership with CSR Professional Services Inc., Jensen Beach, Florida) and in our digital business,” Alston says. “We will continue to evaluate other adjacent service opportunities, like the Data Breach Reporting Service that we rolled out last year, and believe there remains compelling growth opportunities in working with our clients in providing other valued support and management services in all aspects of the life cycle of information.”
 

Distinguishing features

Alston says Access’ culture helps to set the company apart from its competitors. “We believe strongly in treating our clients, team members and our community with great respect.

“First,” he says, “we believe that the quality, experience and passion of our team sets us apart from all other service providers. Second, at Access, we feel we have the best combination of customer-focused team members, facilities, operational infrastructure and available capital to grow in support of our clients.”

Alston also says the company’s approach to customer service is a distinction. Access uses a localized customer support model, which he says “provides our clients with a direct and easy method for submitting service requests and resolving day-to-day issues.”
 

Responding to pressure

As clients’ knowledge regarding information management and governance grows, Alston says Access must continually improve its range of services to meet their complex needs while delivering more efficient and cost-effective solutions.

“At the same time, we need to be aware of the increasing pressure on information management, information security and information governance and all the possible liability—and there is significant liability here—associated with improper records management, especially as our clients become more aware of these liabilities and attempt to improperly shift an unreasonable amount of liability to RIM service providers.”

To prevent this shift of liability from the client to Access, Alston says the company pays close attention to its customer contracts. The company’s contracts director helps Access navigate limits of liability and indemnification terms and conditions in client contracts, he adds. Access also may call in attorneys to review proposed contracts depending on their complexity.

“Entrepreneurs are signing contracts, accepting unlimited liability,” he says of other independent records management firms. “Don’t accept it,” he advises other commercial RIM services providers.

Alston says Access has turned business away because of this practice, but he adds that most of the company’s clients are willing to work with Access to create a contract that is fair for both parties.

He explains, “It’s not that we don’t have confidence in our ability to protect the information, it’s just a bad business practice.”
 

Focusing on growth

Access is working toward its goal of growing global revenue to $600 million by 2020, Alston says.

“In order to achieve this goal, we will continually review and look at a number of new ideas that come our way, but most of the new ideas are too early to share at this point,” he adds.

“What may not come as a surprise to you is that we will continue to selectively acquire RIM businesses in our existing markets and in new markets as a core part of our go-forward strategy. We will also continue to expand internationally into new and existing markets with good growth profiles.”

The company also plans to further develop and enhance its digital service offerings and related services and invest in sales, marketing and account management resources to further strengthen its client relationships, he says.

“Long term, we will ramp up our IPO (initial public offering) readiness and also invest resources to explore a REIT (real estate investment trust) conversion in the coming years.”

The author is editor of SDB and can be contacted at dtoto@gie.net.