On the back of the recent announcement that Lacima had been acquired by EEX, I talked with Dr. Chris Strickland to add some details to the announcement. The deal has now closed as of mid-last week and so I was interested as to why Lacima had agreed to be acquired? Chris told me that it had been seeking an investor or strategic partner for some time now and that the primary driver was to allow Lacima to meet its potential and grow faster within the marketplace. “We weren’t growing as fast as the market potential suggested we should and part of the reason for that was the fact that we were owned by two private families and as a result we were somewhat conservative in our approach,” he said. “By finding an outside investor or partner, we could grow the business faster and in line with what we truly believed our potential was.”
Apparently, Lacima had many meetings with prospective partners and investors but realized that while there was lots of money available for vendors like Lacima much of it came with the need for another financial event 3-5 years later. A resale, as Chris put it. So, in the end, EEX became the partner of choice as its interest was in offering its customer base added value in the areas of pre-trade and post-trade risk. EEX also wanted the Lacima team to stay on and manage the business with long-term incentives to retain key management like Chris, long term collaborator, Dr. Les. Clewlow, and CFO Lorna Strickland. Chris sees the acquisition as excellent news for Lacima and its’ customers, allowing Lacima a bit of leeway to meet its potential and grow. “Being part of the larger EEX group network will provide Lacima access to a larger distribution and customer network in Europe, USA, and Asia while the exchange group benefits from tools for pre-trade analysis, structuring and valuation, which will further support trading decisions for their customers. We have a business plan and objectives and the where with all to go for it now with a little less conservatism,” he said.
Among early improvements Lacima wants to make is to create its own hosted solution and all of the infrastructure necessary to support it. “While many of our customers chose to host our solution in the cloud, we haven’t yet been able to offer a hosted solution ourselves,” he told me. EEX has both a trading platform and a company that builds trading platforms, so they can assist Lacima in meeting that objective as an early priority Chris told me. “Initially, we plan to sell our existing solution to the EEX client base, and later on we will integrate our analytics into their technology allowing EEX’s clients the ability to use market-leading pre-trade analysis and post trade risk management tools.” In the first part of 2022, Lacima will likely focus on Europe and Singapore where it has seen some LNG-related interest and opportunities. EEX also owns an exchange in the US so there is also opportunity to grow there as well Chris said.
For Chris, the acquisition allows Lacima more freedom to expand and grow along with access to resources to help with that. The management team and staff will not change, and he has long-term incentives to stay and steer the ship for some time to come. “We still need to run a profitable business,” he told me. “But we can go for more growth, and it should be easier to reach our potential in the market with EEX as partner and owner. It gives us more confidence to be a little less conservative and provides us all the incentive to maximize our potential.”