NZX today announces the acquisition of Melbourne-based Clear Group, owner of the Clear Grain Exchange.
This is in the form a purchase of the assets of Clear Group, comprising in particular, CLEAR Commodities, the CLEAR Grain Exchange and CLEAR Interactive, the technology developer of the CLEAR Grain Exchange.
The initial purchase price will be approximately AUD$6.4 million paid in cash. If significant trading volumes are achieved over a three year period, the increasing value of the grain platform will be recognised and an additional payment made. The CLEAR Interactive team will also be focused on developing further agri-market infrastructure and customer connectivity, which may result in a further asset payment.
CLEAR Grain Exchange is the Australian grain industry's only full-service electronic market for the trading of grain. CLEAR Grain Exchange provides a global best in class full end-to-end solution for spot commodities trading. CLEAR Grain Exchange also provides a full suite of back office, settlement and payment services.
NZX CEO Mark Weldon said, "This transaction brings together two key components of NZX's strategy: trading of agricultural commodities and acquiring technology development expertise to grow markets.
"NZX and CLEAR both recognise the importance of reliable, efficient and transparent agricultural markets operated on world-class technology and backed by a rich set of information and data. This deal combines CLEAR's technology development expertise and grain market knowledge with NZX's expertise in developing markets and distributing market data and information.
"The strategic fit, opportunities and advantages are compelling. CLEAR Grain Exchange, as a world-class technology platform, will form the technology base of a broader NZX strategy," said Weldon.
CLEAR Group Managing Director, Grant Thomas said, "We have had strong industry support for CLEAR Grain Exchange as it provides a complete and accessible price solution for grain growers and gives buyers access to a large number of Australian grairain producers.
"We have introduced improved liquidity, price transparency and more price discovery to the marketplace and are looking forward to developing our services to the grain industry and across a range of commodities with NZX."
CLEAR Grain Exchange joins NZX's agricultural data and market information offering that includes ProFarmer - an Australian grain market data business - and NZX Agrifax, Dairy Week and eight Agri-Media titles including Farmer's Weekly.
Using CLEAR Grain Exchange, grain growers can access the best prices from a range of buyers and choose from these in a real-time environment. Grain buyers can view offers and lodge bids directly via CLEAR Grain Exchange.
There are more than 1,100 grain growers with active CLEAR Grain Exchange accounts. In addition, there are over 100 brokers and over 200 buyers and bulk handlers across Australia registered with CLEAR Grain Exchange.
CLEAR Grain Exchange also has an agreement in place with GrainCorp which allows growers with grain warehoused at a GrainCorp site to automatically sell their grain via CLEAR Grain Exchange. GrainCorp is Australia's largest bulk handler of grain with over 13,000 registered growers, who will become automatically connected to CLEAR Grain Exchange.
"CLEAR Grain Exchange is proven and has strong growth potential in grain and other agricultural commodities. This is the best platform we have seen. The opportunity to acquire a full platform with connected customers and proven speed to market makes extremely sound business sense," said Weldon.
CLEAR Grain Exchange and NZX's Energy Markets business both use the same development language. The CLEAR Interactive and Energy technology teams strengthen NZX's information technology development and market operations capability considerably.
"As an integrated trans-Tasman company we can achieve so much more than two separate entities could. The synergies between CLEAR Grain Exchange and NZX's assets and capabilities and alignment around a global strategy create an exciting future for our business and our people," said Thomas.
NZX and CLEAR Group expect the transaction to close in late October. NZX will be hosting an Investor Day in mid November.