BY Richard Summerfield
US exchange operator International Exchange Inc (ICE) is to acquire Interactive Data Corp (IDC) for around $5.2bn.
According to ICE, the agreed price will include $3.65bn in cash and $1.55bn in ICE stock. The deal is expected to close by the end of 2015, subject to the approval of the shareholders of both companies. The deal is ICE’s biggest acquisition since the company’s takeover of the New York Stock Exchange. The company is believed to have beaten competition from rival exchange operator Nasdaq and financial data publisher Markit in order to agree a deal for IDC.
ICE believes that the deal will generate cost synergies of $150m, which will be largely realised within three years. "This transaction furthers our expansion into meeting the financial information needs of our market participants globally. With our diverse markets across virtually all asset classes, IDC will enable us to address more growth opportunities by leveraging the distribution and reach of our complementary global platforms for trading, clearing and data on a combined basis," said ICE chairman and chief executive Jeffrey C. Sprecher, in a joint statement announcing the deal. "With IDC as the cornerstone in the next phase of extending our services, we will build on our track record of solid execution on integration and innovation by focusing on the needs of our customers in the evolving data services marketplace."
Interactive Data, based in Bedford, Massachusetts, provides financial data to banks, hedge funds, mutual funds and other users. "Today’s announcement marks the next step in an exciting journey for IDC," said Stephen Daffron, chief executive of IDC. "With ICE, we have the long-term capital, strategic support and collective set of relationships to further grow our company and evolve our platform in the rapidly-changing capital markets landscape. We have enjoyed our partnership with Silver Lake and Warburg Pincus and thank them for their contributions to our success, as well as for their leadership in several strategic and technological initiatives that strengthened the company’s growth outlook."
The sale to ICE will see IDC’s owners, private equity firms Silver Lake and Warburg Pincus, exit their $3.4bn investment in the company after more than five years. They had previously pursued an alternative exit - until very recently intending to take IDC public. “It has been our privilege to partner with IDC," said Mike Bingle, managing partner of Silver Lake and Jim Neary, managing director and a member of the executive management group of Warburg Pincus. "Since our investment in 2010, the company has laid the foundation for long-term growth, by launching a state-of-the-art technology platform, developing innovative new products such as its cutting-edge real-time pricing solution and maintaining an unwavering focus on value for its clients. IDC is thrilled about its future with ICE, and its continued leadership in financial data services."