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Merit, Rowe Announce Integration Plans; Production Moves To Mexico

Posted On: 2/26/2009

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Rowe International, Merit Entertainment

BRISTOL, PA -- Touchscreen videogame maker Merit Entertainment, headquartered here, and jukebox manufacturer Rowe International will integrate their production and workforces, according to an announcement by the companies' president and chief executive, Michael Maas.

In a key part of the streamlining plan, Rowe will shift manufacturing from Grand Rapids, MI, to Reynosa, Mexico, on the Texas-Mexico border. This includes Rowe jukeboxes and money-changing machines, as well as Merit terminals. The transition is expected to complete by the end of 2009, when the Rowe factory will close. About 100 jobs will be affected.

Jukeboxes from Automatic Musical Instruments (AMI), which merged with Rowe in the 1950s, were built in Grand Rapids since the early 20th century. Merit's manufacturing operations moved to the Rowe factory in 2007. Maas said some production employees there would be offered the opportunity to transfer to Reynosa.

"It is essential to control costs and increase efficiencies to remain competitive in today's global environment," Maas said. "These changes will reduce overhead and allow both companies to better serve our customers with even more cost-competitive products."

According to Maas, Merit and Rowe will operate under a single management team and salesforce headed by sales vice-president John Margold, a coin-op marketing veteran who joined Rowe in 2002. Other company functions, including marketing, customer service, and software and hardware development, will also consolidate. "We will go to market with a unified salesforce," the chief executive said.

Both Merit and Rowe are owned by The Harbour Group, a St. Louis-based private-equity firm, and are actively joining forces under the direction of Maas. The firm also owns related companies, including AMI Entertainment, a music provider to digital jukeboxes, and the newly formed AMI MegaNet, which oversees the development of on-premise promotions running on AMI-powered jukeboxes and Merit's online videogame terminals. AMI Entertainment will remain in Grand Rapids.

Maas, who joined the group of companies in 2007, is the architect of a business model that is seeking to improve the integration of coin-op products and wider applications - jukebox and videogame content, networking services, public-space hardware and TV screens. He is a former executive of Microsoft and IBM.

"There are synergies from the consolidation that will help both companies become even stronger," Maas said. "We are pleased that during generally tough economic times, we are able to maintain our customer service levels and development investments by leveraging the combined strengths of both companies."

Residing in the Mexican state of Tamaulipas, Reynosa is located across the Rio Grande from McAllen, a Texas town in Hidalgo County. Several U.S. companies have established satellite manufacturing facilities in Reynosa, including Brunswick Corp. In 2007, Brunswick relocated the production of Valley- Dynamo pool tables from Dallas to the Mexican factory town.

Merit is a global leader in touchscreen entertainment and estimates that its Megatouch videogames generate 4.6 billion plays annually. The widescreen Aurora and low-profile Rx the newest Megatouch game terminals, along with the Modbox juke. Rowe's commercial jukeboxes include the GrandStar, Solara 2 and NiteHawk, which are powered by AMI's broadband entertainment network. It is also the leading manufacturer of CD-to-digital upgrade kits. Rowe's changer machine line consists of the BC, Century and Bill Breaker series.