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NZX has now signed a conditional Sale and Purchase agreement for the acquisition of the energy and related assets of The Marketplace Company Limited (M-co).
The purchase price at settlement will be $13.10 million plus an adjustment for the working capital position at closing. This agreement excludes any assets or operations relating to the Unlisted platform.
Rowan Macrae, Head of the NZX Corporate Office, said, “NZX is excited by the knowledge and skills relating to the energy markets that reside in M-co and we are looking forward to working with M-co staff to ensure that opportunities in these markets are fully realised. As previously highlighted, a particular focus will be working to develop a liquid hedge market for New Zealand electricity - which NZX considers will provide price certainty and transparency for major electricity users, for retailers especially those without significant hedging generation, and for generators looking to lock in prices.”
Settlement will occur following Electricity Commission and Gas Industry Company approvals and other significant contract assignments. This is expected to be by the end of May 2009.
NZX recognises the importance of seamless service to M-co customers and is offering employment contracts to all M-co staff. They will be based in the NZX Centre in Wellington. Carl Hansen, M-co CEO, will be pursuing other opportunities, although he will remain available during transition and to assist on certain consulting projects for the Electricity Commission.
Shane Dinnan, General Manager Market Operations for M-co, said, “We are excited about opportunities this transaction offers in terms of both the expanded career paths that will be available for our team and the opportunity to develop a broader range of products to meet customer and stakeholder needs.
“A comprehensive integration plan has been developed to ensure uninterrupted operations and, most importantly, that M-co’s high level of customer responsiveness and service is maintained through the transition period and beyond," said Dinnan.
Integration will be complete by the end of July.
“There is strong alignment between M-co and NZX operations and there is potential for further growth and cost efficiencies through both system integration and knowledge sharing. We are excited about the opportunities that lie ahead with a very strong and integrated team,” said Macrae.
M-co has 16 years’ experience in the design, build and operation of electricity and gas markets both domestically and globally. Key services provided by M-co are market design, market development and market operations including pricing, trading, billing, reconciliation, registry services and information and analysis. Up to 80,000 bids and offers are submitted daily via the New Zealand electricity market serviced by M-co. This acquisition will change the scope and scale of NZX’s operations profoundly.
The M-co acquisition will be funded by a mixture of equity and debt.
