“Putting the two companies together accelerates our Number One priority, which is reaching profitability,” Robinson said. “With the accelerated revenue growth that we’re convinced we’ll be able to generate and the cost reductions we’ll achieve, we anticipate reaching positive cash flow as soon as late next year.”

Robinson and Envera CEO Bob Mooney, who will take a seat on the ChemConnect Board of Directors, said they believe the merger of deal-making marketplace ChemConnect and ERP connectivity hub Envera will speed adoption of e-business in the chemical industry by giving users a single source for both types of functionality.

“When you look at us on a combined basis, we have the greatest number of investors of any exchange, the widest number of e-business systems and services in operation, and a tremendous sales force with global representation and strength,” Mooney said.

Added Robinson: “The customers I’ve talked with today and the customers of Envera that Bob and I have talked with are all very excited about the prospect of having the opportunity to integrate their commerce from beginning to end. We expect to have a significant impact on adoption rates because users will no longer have to wonder whether Envera will ever have a negotiation link or whether ChemConnect will ever have ERP-connectivity capabilities. We have it.”

Pricing is still being determined, but Robinson said that pricing will be primarily on a subscription model rather than a transaction-based model. “At Envera, pricing has been on a subscription basis from day one, which makes a lot of sense because you want to encourage use, not discourage it. At ChemConnect, our original pricing was on a transaction model, but we’ve been transitioning to subscription-based pricing. For the merged company, the bulk of the revenue will be on a subscription basis,” although he said prospective members will be able to test new services on a transaction basis.

“What we want to do is to encourage people to come in at any point of our fully integrated, end-to-end offer,” Robinson said. “We don’t want to penalize anyone who only wants to use a part of it, but we want to encourage them to adopt fully across the entire work process.”

Financial terms of the deal were not disclosed, but Robinson said all of the investors and shareholders in Envera and ChemConnect are now shareholders in the merged company. That puts a number of companies – including BASF, BP, Bayer, Celanese, Dow, DSM, Rohm & Haas, Mitsui, and Mitsubishi – in an awkward position. All are investors in ChemConnect but also are founders of Elemica, Envera’s major competitor. Thursday’s announcement clearly caught them by surprise.

“We’re trying to understand the agreements and the business model” of the merged companies, said Mary Jo Piper, Dow’s e-business spokesperson. “We’re not in a position at this point to be able to comment. We hope to be able to say something in about a week.”

Requests to Elemica for comment had not been answered as this story went to press.

If ChemConnect members who also are founders of Elemica find their situation too awkward, however, it’s conceivable that some might abandon ChemConnect for rival CheMatch. But CheMatch President larry McAfee said he doesn't expect the deal to change the competitive landscape for CheMatch in any meaningful way.

"We already do business with most of the major chemical companies, so I don't see it having much of an affect," McAfee said. "It doesn't cause us to modify our business plan in any way."

McAfee said CheMatch remains focused on developing liquidity in the commodity markets through trading of both physical and financial products, including its futures trading offerings in cooperation with the Chicago Mercantile.

Regardless of how membership eventually shakes out, AMR Analyst Leif Eriksen said the deal appears to be a win for both ChemConnect and Envera – but especially for ChemConnect.

“The interesting irony here is that ChemConnect had this megalithic view of the world from day one in which they were targeting to be all things to the chemical industry,” Eriksen said. “When the consortiums emerged, they were relegated to handling the 10-20% of business that isn’t contractual. Now, low and behold, here they are back to doing exactly what they said from the very beginning.”

In a commentary issued by AMR shortly after the deal was announced, Eriksen also observed that the merger of an independent trading exchange (ITX) – commonly known as a dot com – and a consortium trading exchange (CTX) apparently is yielding not a consortium exchange, as most experts had predicted, but a kind of super-dot com. “Although it is too early to know how the multiple overlapping B2B ownership issues will work out, the merger does answer one of the mysteries of B2B marketplace math: ITX + CTX = ITX,” Eriksen wrote. “All of the investors in Envera will become investors in ChemConnect but none of them will have a seat on the ChemConnect board. The merged company will retain ChemConnect’s independent corporate structure as well as its management team. In other words, it will be an ITX.”

Mooney and Robinson said the decision to merge was the natural evolution of a shared vision. “We’ve known each other as companies for a long time in e-commerce years,” Robinson said. “Both companies understood that eventually this is where we would be. In spite of the fact that Envera was a leader in its territory and ChemConnect a leader in ours, we really didn’t provide full value until we were integrated. What’s new is that our customers are realizing that, too. They are responsible for deciding that the time to do this is now.”

Robinson said the Envera brand will survive as the brand of the merged companies’ integration offering. Although the headquarters will be in San Francisco, the Envera office in Richmond, Virginia, will remain.