Blog News Events Publications Directory Community Industry Voices Media

Acquisitions and Investments

Perhaps missed in the run up to the holidays were two interesting announcements. The first involved the acquisition of Lacima by EEX and the second involved Dycotrade in which Quadrum Capital acquired DycoTrade shares from investment company TIIN Capital.

Lacima/EEX

Lacima has been a key feature of the energy risk vendor landscape for a couple of decades and its founders, Dr Les Clewlow and Dr Chris Strickland, are familiar names to anyone involved in commodities risk management. It describes itself as a “multi-award winning specialist provider of software and advisory services dedicated to trading, valuation, optimisation and risk management for global energy and commodities markets. It helps clients to maximise profit potential and make more informed decisions by providing tools that yield more accurate valuations, hedging analysis and risk exposure analysis for portfolios of complex financial contracts and physical assets.” The European Energy Exchange (EEX) is the leading energy exchange which builds secure, successful and sustainable commodity markets worldwide – together with its customers. As part of EEX Group, a group of companies serving international commodity markets, it offers contracts on Power, Natural Gas and Emission Allowances as well as Freight and Agricultural Products. EEX also provides registry services as well as auctions for Guarantees of Origin, on behalf of the French State.

AdvertisingBrady Technologoes
AdvertisingTrends in Commodity Risk

I will be talking to Chris Strickland next week when I hope to learn more however, the announcement quoted Chris as saying, ““We feel that EEX is the perfect partner to fulfill Lacima’s strong growth ambitions. Our recognised innovative analytics capabilities perfectly align with EEX’s global energy and commodities client base who all need to perform pre-trade analysis and post trade risk management. Our analytics, together with EEX’s market offerings, will lead to significant opportunities for both organisations. This deal will also benefit our existing customers who will continue to be serviced by a familiar, but stronger, Lacima. We are incredibly excited about the future with EEX and look forward to working with the team.” It also includes a quote from Peter Reitz, EEX CEO who states that, “The acquisition of Lacima Group will enable EEX Group to extend its offering to a range of pre- and post-trade services in the global commodity markets and extend our presence in the Asia-Pacific region. Lacima’s expertise will support our client’s decision making, risk management and reporting processes as well as further reduce entry barriers for the registration of trades with EEX for our global customer base.

Given the content of the announcement, this could prove to be an intriguing acquisition indeed hinting as it does at further EEX services based around the Lacima acquisition. The acquisition should close this month and indeed, may already have done so. Lacima users are assured in the announcement that, “EEX’s acquisition of Lacima will be a seamless process for all Lacima clients whose relationship with the company will remain unchanged. Lacima will continue to operate as an entity from its current offices in Sydney, London and Denver. All senior management members of Lacima Group will continue in their current roles and are fully committed to their long-term involvement with the company and its further success as part of EEX Group.”

Dycotrade

The Dycotrade announcement is essentially a change in ownership at some level. Requests for further details have been made. However, the announcement alludes to a shift in business model at Dycotrade from licensed software to software as a service with the new owner ostensibly supporting this transition. Dycotrade is a world-wide supplier of ERP and BI software solutions for (commodity trading) businesses in the Food, Feed and Metals industries and under our classification, it offers Commodity Management software on the MS platform. Arie Willem van der Plas, CEO at DycoTrade said in the announcement that  “this transition means that we can support our customers more quickly, flexibly and efficiently in terms of optimising their operational and logistical processes. Furthermore, the new model formed the basis for the rapid growth that we have experienced over the past few years, which is the foundation for the prosperous international expansion that we aim to realise with the help of Quadrum Capital.” The announcement goes on to say that Dycotrade “has the ambition of setting the world-wide ERP standard for trade in raw materials, and to expand into new sectors. Peter Oostenenk, managing partner at Quadrum Capital: “By making the transition to providing software ‘as a service’, DycoTrade has enormous international growth potential. What is more, given the increasing complexity and uncertainty facing the sectors in which it operates, the solutions that DycoTrade provides are highly relevant. So we have every confidence that we can achieve this ambition in partnership with the management.”

The announcement also reassures users that the “current management of DycoTrade will remain in place to continue moulding the company’s envisaged ambitions for growth under the auspices of Quadrum Capital.”

In both cases, software as a service and services in the cloud seem to play an important role. It will be interesting to see how they develop over time and we will be tracking their progress here at CTRMCenter.