Intercontinental Exchange Completes Buyout, Boosts Portfolio
Zacks Investment Research | Jan 02, 2018 09:09PM ET
Intercontinental Exchange, Inc. (NYSE:ICE) has recently completed the buyout of Virtu BondPoint from Virtu Financial for an aggregate amount of $400 million in cash. The buyout will enable the acquirer to boost fixed income execution services as well as extend and further strengthen its capability to cater to the growing global demand for efficiency and information.
Details of the Transaction
On Oct 24, 2017, Intercontinental Exchange inked a deal with Virtu Financial to purchase Virtu BondPoint. The acquired company is an industry-leading provider of electronic fixed income trading solutions for the buy-side and sell-side providing access to centralized liquidity and automated trade execution services via its ATS that links more than 500 financial services firms. On completion of the buyout, BondPoint will be part of Intercontinental Exchange’s fixed income trading and data solutions, which comprises ICE Credit Trade for dealer-to-dealer corporate bond trading and BondEdge for bond portfolio analytics to name a few.
Benefits of the Acquisition
Addition of BondPoint to Intercontinental Exchange’s portfolio is likely to help the latter continue with its innovation efforts for its client as fixed income markets develop. Intercontinental Exchange remains optimistic about the addition of BondPoint and the supporting solutions, which in turn might allow the acquirer’s clients to make transactions with confidence in an increasingly transparent, automated and data-driven marketplace.
The BondPoint buyout is expected to enhance Intercontinental Exchange’s footprint in the global bond markets. Apart from expanding its presence in the fixed income markets, BondPoint's all-to-all trading platform and its leading position in the retail channel will lend Intercontinental Exchange with the opportunity to engage new customers and expose them to its wide range of risk management tools and content.
Inorganic Growth Story
Intercontinental Exchange’s continued efforts in pursuing prudent acquisitions have allowed the company to achieve global diversification, while tapping new opportunities in the emerging economies. It is important to note that Intercontinental Exchange has a stellar track record of buyouts, which include Interactive Data Corporation, Trayport, Standard & Poor’s Securities Evaluations, Inc., to name a few. Such strategic buyouts have not only expanded growth of the company but have also resulted in achieving expense synergies. Moreover, the Intercontinental Exchange’s solid capital position has given the required support to pursue such strategic initiatives and is expected to do the same in the near term.
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Zacks Rank and Share Price Movement
Intercontinental Exchange holds a Zacks Rank #2 (Buy). Shares of Intercontinental Exchange have rallied 22.1% in a year’s time, underperforming the Original post
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