(EnergyAsia, February 19, Tuesday) — Oslo-listed IMAREX ASA has announced it is acquiring commodities broker Spectron Group plc for a GBP 70.35 million or around US$140 million.
 
IMAREX, which operates a derivatives market for a wide range of commodities, said the deal “substantially strengthens” its position as a premier trading and clearing hub for the worldwide commodity and energy derivatives markets.

Founded in 1988, Spectron Group operates an independent energy brokerage from its offices in London, Singapore, Frankfurt and across the US, and has more than 150 employees.
 
Spectron Group is licensed by the Financial Services Authority of the UK to operate a multilateral trading facility. Its screen based trading system serves more than 1,500 professional users trading physical and financial products in a number of wholesale markets, including natural gas, electricity, emissions, coal, metals and weather. More than US$150 billion worth of energy products is transacted via Spectron Group annually.

Spectron’s consolidated operating revenue for the period from 1 January to 30 November 2007 was GBP 34.2 million with an after-tax profit of GBP 4.4 million. The previous year, it had profit of GBP3.5 million on a revenue of GBP 30.5 million.

Of Spectron Group’s cash holding of GBP 13.4 million on January 31, 2008, GBP 6.5 million will be kept in the company (pro forma as at that date).

Its consolidated balance sheet as at 30 November 2007 showed assets of GBP 20.2 million and liabilities of GBP 8.8 million and an equity of GBP 11.4 million. The corresponding figures as at 31 December 2006 were assets of GBP 15.4 million, liabilities of GBP 8.1 million and an equity of GBP 7.3 million.

“We have spent 20 years building a global brand in energy and are now delighted to be joining forces with IMAREX in a partnership that is good for our customers, employees and shareholders. The merging of the two businesses will create a company with the scale and resource to compete even more effectively in the global commodities marketplace,” said Spectron Group’s CEO, Andrew Stephens.

Of the total consideration of GBP 70.35 million, GBP 21 million will be paid in IMAREX shares. The final number of consideration shares will be determined based on the average closing price of the five last trading days ending two days before the completion of the acquisition.

The consideration shares will be subject to a lock-up period with certain release clauses. The remaining GBP 49.35 million will be funded by 80 million Norwegian kroner in cash currently held by IMAREX, up to 350 million kroner from a term loan and the remainder by a share capital increase by issuance of new shares in IMAREX.

The terms and the structure of the share issue will be decided later. NYMEX Holdings Inc has agreed to subscribe to a part of this share issue, which will be managed by Pareto Securities AS.

IMAREX is one of the fastest growing commodity derivatives market places, with a particular focus on ocean freight and energy. IMAREX was a pioneer in bringing electronic trading of cleared freight futures contracts to the world markets in 2001. In 2007, contracts worth about
US$37 billion were transacted via IMAREX (including freight, power, fuel oil and emissions).

Before the acquisition, IMAREX had more than 135 employees in Norway, UK, Switzerland, Germany, the US and Singapore.

Spectron Group and IMAREX both use the same electronic trading platform and the combined group will hold leading positions in front-end liquidity in all relevant energy derivatives markets in Europe.

Herman W. Michelet, who founded IMAREX in 2000, will be the combined group’s CEO, based in Oslo, while Mr Stephens will remain Spectron’s CEO, based in London.

Mr Michelet said: “The derivatives market is rapidly being consolidated into fewer and stronger players, and the acquisition of Spectron Group takes our joint business to a new level in terms of client base, geographical footprint, trading volume, product and service offering.

“Combining IMAREX with the strong market position and also the exceptional team of Spectron Group, we now plan to follow through on our stated ambition to become a leader in the fast growing energy derivatives market.”