NZX says Clear Group purchase conditions met

Monday 2nd November 2009

NZX, the stock exchange operator, said conditions for its acquisition of Australia’s Clear Group have been met, allowing it to expand its agricultural assets with the purchase of a grain exchange.

The initial purchase price is A$6.4 million cash, with agreement for further payment over three years, based on meeting targets for trading volumes and increased value for the grain platform.

The acquisition includes the Clear Interactive business, which will be “focused on developing further agri-market infrastructure and customer connectivity, which may result in a further asset payment.,” NZX said.

Australia has a A$10 billion grain market, and the Grain Exchange is looking to capture part of the A$100 million to $150 million growers pay in commissions each year to sell their products. Grain Exchange was set up in November to take advantage of the break-up of the Australian Wheat Board monopoly. It is a scalable enterprise that breaks even at low market share, CEO Mark Weldon told BusinessWire.

More than 1100 grain growers, 100 brokers and 200 buyers and bulk handlers across Australia are registered with Grain Exchange, which is soon to link with a further 13,000 growers registered with GrainCorp, that country’s largest grain bulk handler.

Grain trading will add to a suite of agricultural products NZX plans to roll out including milk powder futures as it seeks to diversify away from stock trading, where volumes have dwindled this year.

Shares of NZX fell 0.6% to $7.90 today and have soared 61% this year.

Businesswire.co.nz

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