While the consolidation of the actual exchanges has largely come to an end, the desire for exchanges to take on new products and new opportunities remains. Intercontinental Exchange Inc. (NYSE: ICE) has announced that it entered into a definitive agreement to acquire Interactive Data.
This will allow ICE to own a top provider of financial market data, analytics and related trading solutions. ICE will buy Interactive Data from the private equity arms of Silver Lake and Warburg Pincus, and the transaction is valued at approximately $5.2 billion.
As far as a payment for the deal, ICE’s $5.2 billion bid is shown to be broken down as $3.65 billion in cash and some $1.55 billion in ICE common stock.
Investors should consider this a done deal, barring any unexpected regulatory reviews. Monday’s press release showed that the buyout was unanimously approved by the boards of directors of both companies. The aggregate number of ICE common shares offered is 6.5 million shares and was also said to be up to 2.2 million additional Intercontinental Exchange common shares, based on a sliding scale from $179.07 to $238.76, in the event that ICE’s weighted average stock price over a specified period leading up to closing is less than $238.76. The mix of merger consideration being paid by ICE is approximately 70% in cash and 30% in shares.
What matters here is that ICE already operates exchanges and marketplaces. It has ICE Futures Europe, ICE Futures U.S., ICE Futures Canada, ICE Endex, NYSE Amex Options, NYSE Arca and ICE Futures Singapore, as well as over-the-counter markets for physical energy and credit default swaps and central counterparty clearing houses.
ICE has a market value of $27.6 billion. Its share price of $246.12 is against a 52-week range of $202.24 to $254.91.
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