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Intercontinental Exchange Buys AFX to Strengthen Index Business
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Intercontinental Exchange, Inc. (ICE - Free Report) has acquired American Financial Exchange ("AFX") from 7RIDGE. The addition of AFX to its portfolio will help the acquirer serve customers through the mortgage technology network with new and innovative product offerings.
AFX is an electronic exchange for direct lending and borrowing for American banks and financial institutions. It serves regional, midsize, community and minority-owned banks. Christopher Edmonds, president of ICE Fixed Income and Data Services, considers AFX a natural fit as it will complement ICE’s leading global index business and its mortgage technology network.
Strength in the index business should continue to drive fixed-income data and analytics revenues. Increased activity owing to continued interest rate volatility, strength in the index business, growth in pricing and reference data business, and growth in ICE Global Network offering, coupled with strength in desktop, feeds and derivatives analytics revenues, are likely to boost data revenues in the days ahead.
However, this acquisition is not estimated to have any material impact on the acquirer’s 2025 financial results, its deleveraging or capital return plans.
On the other hand, AFX stands to benefit from ICE’s leadership as it envisions building a transparent, robust and efficient interbank lending ecosystem for regional and local American banks.
With over 5,000 indices representing more than $1 trillion in benchmark assets under management, the company boasts being the second-largest fixed-income provider globally. As of September 2024, ICE accounted for about $670 billion in assets under management (AUM) across passively managed products and approximately $2 trillion in AUM across active and passive strategies combined. The recent acquisition further consolidates ICE’s leadership position.
ICE’s inorganic story is impressive. This Zacks Rank #3 (Hold) company has a decent history of acquisitions that have not only fueled its growth but have also led it to achieve expense synergies. Such initiatives enhanced the company’s product suite and services, which, in turn, aided bottom-line growth. Its acquisitions are also in line with its aim of generating long-term value for shareholders.
Shares of ICE have gained 14.8% in a year compared with the industry’s increase of 17.5%. A compelling portfolio, a wide range of risk management services, cost synergies and solid capital position should help shares trend higher.
The Zacks Consensus Estimate for CME’s 2025 earnings indicates a 2.1% rise from the year-ago estimated figure. It has moved 0.7% up in the past 30 days. Shares have gained 15.9% in a year.
The Zacks Consensus Estimate for ABCB’s 2025 earnings indicates a 3.3% rise from the year-ago estimated figure. It has moved 2 cents up in the past 30 days. Shares have gained 19% in a year.
The Zacks Consensus Estimate for ACRE’s 2025 earnings implies a 116.7% increase from the year-ago estimated figure and has moved 16% up in the past 60 days. Shares have lost 43.7% in a year.
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Intercontinental Exchange Buys AFX to Strengthen Index Business
Intercontinental Exchange, Inc. (ICE - Free Report) has acquired American Financial Exchange ("AFX") from 7RIDGE. The addition of AFX to its portfolio will help the acquirer serve customers through the mortgage technology network with new and innovative product offerings.
AFX is an electronic exchange for direct lending and borrowing for American banks and financial institutions. It serves regional, midsize, community and minority-owned banks. Christopher Edmonds, president of ICE Fixed Income and Data Services, considers AFX a natural fit as it will complement ICE’s leading global index business and its mortgage technology network.
Strength in the index business should continue to drive fixed-income data and analytics revenues. Increased activity owing to continued interest rate volatility, strength in the index business, growth in pricing and reference data business, and growth in ICE Global Network offering, coupled with strength in desktop, feeds and derivatives analytics revenues, are likely to boost data revenues in the days ahead.
However, this acquisition is not estimated to have any material impact on the acquirer’s 2025 financial results, its deleveraging or capital return plans.
On the other hand, AFX stands to benefit from ICE’s leadership as it envisions building a transparent, robust and efficient interbank lending ecosystem for regional and local American banks.
With over 5,000 indices representing more than $1 trillion in benchmark assets under management, the company boasts being the second-largest fixed-income provider globally. As of September 2024, ICE accounted for about $670 billion in assets under management (AUM) across passively managed products and approximately $2 trillion in AUM across active and passive strategies combined. The recent acquisition further consolidates ICE’s leadership position.
ICE’s inorganic story is impressive. This Zacks Rank #3 (Hold) company has a decent history of acquisitions that have not only fueled its growth but have also led it to achieve expense synergies. Such initiatives enhanced the company’s product suite and services, which, in turn, aided bottom-line growth. Its acquisitions are also in line with its aim of generating long-term value for shareholders.
Shares of ICE have gained 14.8% in a year compared with the industry’s increase of 17.5%. A compelling portfolio, a wide range of risk management services, cost synergies and solid capital position should help shares trend higher.
Image Source: Zacks Investment Research
Stocks to Consider
Some better-ranked stocks from the finance sector are CME Group (CME - Free Report) , Ameris Bancorp (ABCB - Free Report) and Ares Commercial Real Estate (ACRE - Free Report) , each carrying a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
The Zacks Consensus Estimate for CME’s 2025 earnings indicates a 2.1% rise from the year-ago estimated figure. It has moved 0.7% up in the past 30 days. Shares have gained 15.9% in a year.
The Zacks Consensus Estimate for ABCB’s 2025 earnings indicates a 3.3% rise from the year-ago estimated figure. It has moved 2 cents up in the past 30 days. Shares have gained 19% in a year.
The Zacks Consensus Estimate for ACRE’s 2025 earnings implies a 116.7% increase from the year-ago estimated figure and has moved 16% up in the past 60 days. Shares have lost 43.7% in a year.