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TSX Group Inc. (TSX: TSX-X) announced today it has entered into an agreement with Enbridge Inc. (TSX, NYSE: ENB) and Circuit Technology Limited granting TSX Group the option to acquire NetThruPut Inc. (NTP) at a time after March 15, 2009. Calgary-based NTP, jointly owned by Enbridge and Circuit Technology, is the leading Canadian electronic trading platform and clearing facility for crude oil.
“Canada is an emerging energy superpower and TSX Group is an important facilitator of efficient markets. We are very excited about this transaction as it complements both our NGX business and our strength in energy in our existing equity markets,” said Richard Nesbitt, CEO of TSX Group. “This arrangement will allow us to further expand on our footprint in the energy space in North America.”
TSX Group has paid $9.5 million for the right to acquire NTP from its shareholders Enbridge and Circuit Technology at a price between $40 million and $95 million depending on NTP's 2008 net earnings. The purchase price payable to Circuit Technology will be satisfied by the issuance of TSX Group shares, subject to Toronto Stock Exchange regulatory approval. This agreement also provides Enbridge and Circuit Technology with the right to sell NTP under the same terms to TSX Group. Exercise of the option by either TSX Group or the NTP shareholders is subject to certain closing conditions.
TSX Group is a leader in the oil and gas sector - more oil and gas companies are listed on Toronto Stock Exchange and TSX Venture Exchange than any other exchange group in the world. At the end of June 30, 2007, there were 434 oil & gas companies with a total market capitalization of $544.9 billion listed on Toronto Stock Exchange and TSX Venture Exchange. Oil & gas companies continue to raise equity on our exchanges with $5.6 billion raised in the first half of 2007, and $10.5 billion raised in 2006. Over 10 billion oil & gas shares, valued at $169.2 billion, traded on Toronto Stock Exchange and TSX Venture Exchange in the first half of 2007. In the same period, more than 5.6 million terajoules in natural gas cleared on NGX, which is a leading North American energy exchange for the trading and clearing of energy contracts. In March 2007, TSX Group announced that NGX had entered into a technology and energy clearing alliance with the Intercontinental Exchange (ICE).
NTP provides a secure internet-based crude oil trading and clearing platform for customers to transact business anonymously in real-time with the assurance of guaranteed commodity delivery and payment. These services are augmented by timely access to current and historical market indicators.
NTP has created a liquid marketplace for buying and selling crude oil. This is achieved through instant access to a wide market audience, creating price transparency, and lower processing and administration costs. Since its inception in January 1999, NTP has grown to be a central feature of the market for a large majority of Canada's leading oil traders, including producers, refiners, and marketers.
