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Changing Nature of Partnerships

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Information technology company JMark Business Solutions Inc. has a new neighbor in its Springfield office.

JMark President Thomas Douglas is opening the door this month to financial software firm TruData LLC in an investment deal that positions Douglas as minority shareholder.

The private partnership is the first of two reached in July between Springfield entities, and it follows a model established by SRC Holdings Corp., which has entered into over a dozen joint ventures the past 30 years.

Distinct from mergers and acquisitions – and separate from local public-private partnerships that have created industrial parks and developments downtown – the recipe for these recent unions is one part investment based on specific market opportunities, another part shared physical spaces and a third part common goals benefitting both partners.

Target industries
At JMark, both companies will retain their names and operate as separate entities.

“We’re going to be two organizations working together to solve great, big problems for our clients,” Douglas said.

The investment deal, for an undisclosed amount, targets the banking industry that TruData already serves.

The firm’s QlikFI software is engineered for banks and credit unions, and Douglas sees it as a strong business-development tool for JMark.

“In the banking environment, if you wanted to quickly run a report of every ATM or debit card in, say, the Target breach, you’d want to look at every person who used a card at Target between this date and this date,” he said.

“With this tool, that would take about 15 minutes to ascertain instead of being a very laborious process where you’d have to mine that data.”

JMark operates a banking division with clients including Bank of Bolivar, West Plains Savings & Loan and First Community National Bank.

An acquisition was considered, Douglas said, but thrown out largely because the companies’ products and cultures were too different.

“Running a software business and valuing a software business is much different than a managed-services business. As a result of that, we decided to leave the two organizations separate, but create a strategic partnership where we are sharing resources where it’s applicable,” he said.

Douglas said there are other applications in banking as well, and a long-term goal would be to develop software for other industries.

TruData has its own clients as well – including Bank of Urbana, Bank of Houston and Table Rock Community Bank – and Douglas said JMark could benefit from those connections.

He envisions a day when JMark’s 601 N. National Ave. headquarters serves as a tech incubator, but no other firms are currently on his radar.

Established partners
The first step, according to SRC Holdings CEO Jack Stack, is identifying a void in the marketplace. Next, comes partnership.

“We convince a partner that by combining our strengths we can deliver a sustainable competitive advantage with superior value and superior financial returns,” he said.

Among SRC’s partners, Stack and company have worked to establish agreements with Case New Holland for CNH Reman LLC, John Deere Co. for John Deere Reman and General Motors Co. via SRC Automotive Inc.

CNH Reman launched December 2009 in Springfield, and it has ballooned to hold over $80 million in assets and employ around 260 workers, according to Stack. The partnership started with nine employees.

“These are jobs that weren’t here before,” Stack said. “We’ve been blessed to have Fortune 500 companies come and create 200 to 300 jobs.”

The key, Stack said, with multinational company Case New Holland is its network of vendors that can benefit from the remanufactured engines and components SRC has produced for years.

“It had purchasing. It had distribution. It had franchisees,” Stack said.

“We had skill sets such as location, talent, people and experience in the marketplace that we’re in.”

CNH Reman’s annual revenue growth through last year has been around 18-20 percent.

This year is leveling off due, in part, to weather issues, but Stack said revenue is still up in 2015. In the last four years, the partners have invested $11 million in tooling, most recently a $2 million clean room for hydraulic fuel products.

While partnerships might break new ground, Stack said it’s important to stick with what you know.

“We play within our own strengths, and that enables us to win,” he said.

Pressing needs
A partnership between Mercy, The Arc of the Ozarks and Missouri State University is designed to address the increasing incidence of autism spectrum disorders.

Now identified in 1 in 68 children in the United States, ASD is emerging at a 30 percent higher rate than previous estimates reported in 2012 by the Centers for Disease Control and Prevention. ASD covers a range of disorders from developmental delays in language and social skills to severe and rare forms of autism, such as Rett syndrome.

Mercy has experts in diagnosis and can handle treatment. The Arc of the Ozarks offers autism care and counseling, and MSU is grooming future trainers and care providers.

In the short-term, Mercy Springfield pediatric psychiatrist Dr. Kyle John said the partners are working one day a month at Mercy’s Pediatric Specialty Clinic in Springfield. Ultimately, the group hopes to dedicate second-floor space as part of Mercy’s $20 million campaign to raise funds for its Women and Children’s Clinic, which is still in development at Mercy Hospital Springfield.

“We want to streamline this into a one-stop shop,” John said.

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