Friday 04 November 2016 09:02 AM
NZX exits Clear Grain Exchange, subject of years-long court wrangle
By Paul McBeth
Nov. 4 (BusinessDesk) - NZX has sold the Clear Grain Exchange to the operation's head, Nathan Cattle, for an undisclosed sum, exiting a business that's incurred multi-million dollar legal costs over a dispute with the previous owners.
The terms of the sale are confidential, but not material to group earnings, and the deal is scheduled to complete on Dec. 1, the Wellington-based company said in a statement. The grain exchange was valued at $1.3 million as at Dec. 31.
The stock market operator announced the sale as part of an overhaul to its agri division, which has been a drag on the group over the past year, with the unit's earning slumping 37 percent to $291,000 in the first half of the year. NZX has already sold the Country-Wide and Dairy Exporter magazines to its current head of agri business, Tony Leggett, which completed on Nov. 1, leaving it with its agricultural data business and the Farmer Weekly publication.
"As a result of these sales, NZX's agri business is now predominantly focused on data and analytics, which is an attractive business in its own right, and continues to provide valuable information to support and develop agricultural commodity products," NZX said. "These businesses are now being restructured into a single trans-Tasman business and NZX is recruiting for a new head for that business to drive growth across these activities."
NZX's 2009 acquisition of the Clear Grain Exchange for A$6.9 million upfront and the prospect of A$7 million in earn-outs ended up a dud for the stock market operator after the unit didn't meet expectations and created an acrimonious split with the vendors, who were still involved with the business. That relationship deteriorated to the point where both parties sued each other, dragging on for several years before finally reaching the High Court earlier this year in a months-long hearing.
The agri restructure comes as chief executive Tim Bennett nears the end of his tenure on Dec. 31, having led the company since mid-2012.
NZX shares last traded at $1.02, and have declined 4.7 percent this year.