Intercontinental Exchange Inc. (ICE - Analyst Report) recently closed the acquisition of S&P Global Inc.’s (SPGI - Analyst Report) Standard & Poor’s Securities Evaluations (‘’SPSE’’) and Credit Market Analysis (“CMA”). These assets under the S&P Global Market Intelligence business unit were purchased from McGraw Hill Financial for cash. The transaction was announced this March.
SPSE specializes in providing fixed income evaluated pricing, while CMA is a leading provider of independent data for over-the-counter markets, including credit derivatives and bonds. Post integration, SPSE will be known as Securities Evaluations.
SPSE and CMA will now be part of the array of data products and services offered by Intercontinental Exchange. The suite comprises ICE Data Services, Intercontinental Exchange’s end-to-end solution for information, analytics and connectivity. These services offer proprietary data and tools for global markets across fixed income, equities, commodities, FX and options markets.
The acquisition will help Intercontinental Exchange address the increasing demand for independent data in the global fixed income and credit markets. Hence, these units will cater to the demand for risk management and valuation services. On the other hand, McGraw Hill Financial divested the units owing to its lack of exposure in securities pricing.
The Zacks Rank #3 (Hold) securities exchange has a solid track record of strategic buyouts including CLE, TradeCapture OTC, WhenTech, the part-acquisition of Cetip, and Singapore Mercantile Exchange. The most significant of these deals is the acquisition of NYSE in Nov 2013, which consolidated Intercontinental Exchange’s position as a premier stock trading platform. The takeover also made transformed the company into the second-largest global exchange group, allowing over 60% accretion in market capitalization. This June, the company entered into an agreement with MERSCORP Holdings, Inc. to acquire a majority equity position in Mortgage Electronic Registrations Systems, Inc. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Acquisitions seem to be a well-accepted strategy in the securities exchange space to add capabilities to product and service offerings. Last month, CBOE Holdings Inc. (CBOE - Analyst Report) announced its decision to acquire Bats Global Markets (BATS - Snapshot Report) for $3.2 billion in a cash-stock deal to address the increasing demand for index–based investing market.
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