Derivatives software house Patsystems has bought the intellectual property rights to ENS, a matching, clearing and settlement technology platform which underpins three Japanese commodity exchanges.
The UK vendor trailed the acquisition within hours of announcing a five-fold increase in losses for the first three quarters this year. The company says it will pay ENS product developer Exchange Network Systems an initial cash downpayment of $2.1 million and the issue of warrants of 300,000 new shares in Patsystems with an exercise price of 95 pence per share. In addition, up to three further annual cash payments of £275,000 each may be made in performance related targets against the current Japanese business.
ENS currently supports the Tokyo Grain Exchange (TGE) as well as the Kansai and Kanmon Commodity Exchanges under Mitsui & Co as the prime contractor. These exchanges have a combined daily volume of between 100,000 and 300,000 contracts a day.
Patsystems says the platform offers brokers and clearers the ability to combine proprietary and regulated markets to create products tailored to clients needs. The technology accommodates continuous and auction-based markets and so will enable derivatives professionals to participate in trading across both liquid and illiquid markets, says Patsystems.
Jacques de Cock, Patsystems CEO says the acqusition "enables us to significantly enhance our Japanese presence both in our own right, but also very importantly through the relationship this establishes with Mitsui & Co".