The rationale for JCM’s acquisition of FutureLogic mirrors the philosophy underpinning the development of its latest products: laying the foundations for enhanced capabilities and creating greater value
Four months ago, JCM Global finalized its US$70.6 million acquisition of FutureLogic. The former is a major international supplier of transaction technologies for the banking, retail, kiosk and gaming industries. The latter is a leading supplier of printers and couponing solutions with a wide range of applications, including slot tickets and gaming vouchers, fuel pump receipts, medical devices, POS coupons and labels for assembly-line products. Gaming is the biggest business segment for both companies and for the combined entity.
As JCM sees it, its purchase of FutureLogic has expanded its portfolio and positioned it better to serve its customers. “[The two companies] have complementary products and there are no overlaps as far as the product space is concerned,” says General Manager of New Business Development Kunal Mishra. “And the customers have been appreciative of that because JCM is obviously a dominant brand and probably the oldest component brand in the business. FutureLogic is obviously No. 1 for printers worldwide in gaming. So when you’ve got the two together, you have a formidable company.
“If you look at every facet of the business on the supplier side, there’s consolidation going on,” he observes. “So it makes sense even at our level, the component level, there is consolidation. And we’ve seen that with some of our customers on the BV [bill validator] side, and we’re seeing that now even with us.”
Though best-known in the gaming world for its iVIZION bill validator, JCM did previously have a thermal printer in its product range, the PayCheck 4, from printer manufacturer Nanoptix, which JCM has been distributing as a JCM product. Following JCM’s initial investment in Nanoptix in 2011 (JCM would go on to increase its investment in Nanoptix in 2012, acquiring a 49% stake), the PayCheck 4 Thermal Printer was rebranded, marketed and sold as a JCM product, and sales increased thanks to JCM’s superior distribution network. Going forward, JCM will continue through its network to support the PayCheck 4 as well as FutureLogic’s products.
The integration of FutureLogic is expected to proceed smoothly. “We look at this deal as fitting perfectly. The customer base is the same and we have complementary products,” says Mr Mishra. “From the Asia standpoint, we look at the positive synergies we can provide customers because our offices don’t have a lot of overlap. Additionally, we bring a lot of regional support to help on both sides.
“For example, we’re local in Singapore now because [FutureLogic] have an office in Singapore. They have a sales person there. And they get to take advantage of our network, including offices in China and Taiwan, as well as the headquarters in Tokyo and Osaka. When you look at the regional offices we really are adding to what was probably already in JCM the most comprehensive support structure in Asia [for gaming peripherals].”
There could also be meaningful synergies on the R&D front, though those will come later. “Right now, the development paths [of JCM and FutureLogic] will continue separately, but over time there’ll be a common development path,” says Mr Mishra. “Printers and BVs are totally different technologies, so those will continue to be separate for the time being. But linking the two devices has a lot of potential, and we really have to be able to show that we can sell two products, and how we can bring out greater value in both products by having two product lines.”
JCM has already committed significant resources towards realizing greater value from its core products. The iVIZION, released in 2012, was designed to be the “foundation of intelligent validation,” incorporating bundled enhancement tools, called Dynamic Network Applications, that give the iVIZION the potential to expand to be more than just a highly advanced bill validator.
The company says, “DNA provides realtime health and event monitoring of all peripheral components used inside EGMs, on table games or inside redemption kiosks, utilizing either a wired or wireless connection to a local server. Peripherals that DNA can monitor are practically limitless and include bill validators, ticket printers, card readers, digital displays and coin acceptors.
“DNA passively monitors the SAS line, provides diagnostics, analytics and valueadded features that can all be managed through DNA’s user-friendly mobile dashboard. The dashboard was specifically designed for platform flexibility and can easily be used on a PC, a tablet or a mobile phone. Additionally, DNA gives flexibility of information the user chooses to use/see for reports, etc.”
Mr Mishra adds, “DNA really helps bring out the value in the peripherals. For example, it can predictively and in real time tell the customers, based on how many notes a BV has taken in, whether there’s any service or maintenance required. It’s an advanced warning system, and also an advanced reporting system. But that’s just the first generation of DNA. DNA is designed to be flexible to work with any peripheral in there. And what tends to happen is, as we expand the printer line to Nanoptix and also to FutureLogic, we bring in a lot of that functionality in there as well. So we can really link up BVs, printers and bring additional value to the customers.”
Another new JCM product with a lot of value-boosting potential is the iV8 table game bill validator, which is currently being trialed in Australia.
In high-volume cash markets such as Macau and Singapore, manually counting and validating currency during buy-ins can shut down play for minutes at a time. By processing eight notes per second, the iV8—“iV” stands for “intelligent validation,” the “8” for the processing speed—enables more hands to be played. “This product’s potential ROI [return on investment] is almost on the first day you use it,” claims Mr Mishra. Another benefit is that by eliminating down time during buy-ins, the iV8, he adds, “increases the entertainment value for the customer as well.”
“We really believe that this product will be the de facto configuration for a table game over the next few years,” he says, “especially as you look at Macau, which is still capped [the government has imposed a 3% cap on the annual growth in the market wide number of gaming tables until the end of the decade] and Singapore [where the casinos have no room to expand]. The best way to get value out of these tables is to increase productivity, which is what this device is there for.”
It took three years for the iV8 to evolve from prototype to final product. But, says Mr Mishra, that’s because the company prefers to patiently evaluate and refine its new creations before selling them—sacrificing short-term gains but potentially creating best-of-breed products that have longevity as market leaders.
