Global markets operator Intercontinental Exchange said Monday it was buying Interactive Data Corporation in a $5.2 billion cash-and-stock deal to expand its financial data services.
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“This transaction furthers our expansion into meeting the financial information needs of our market participants globally”, said ICE chairman and chief executive Jeffrey Sprecher in a statement.
Interactive Data, based in Bedford, Massachusetts, provides financial data to banks, hedge funds, mutual funds and other users. The pair of firms have been weighing a sale of the company as well as an initial public offering, in what is known as a “dual-track” process. Global financial markets have experience a wave of consolidation since the 2008 crash, when trading volumes fell off a cliff and new issues were thin on the ground.ICE’s data business now spans nine asset classes across the 11 exchanges and seven clearing houses it operates, including the NYSE Group and ICE Futures exchanges.
The aggregate number of ICE common shares offered is 6.5 million shares, and up to 2.2 million additional ICE common shares based on a sliding scale from $179.07 to $238.76 per share.
Silver Lake and Warburg Pincus paid about $3.4 billion to take IDC private in 2010. IDC’s recurring revenue has exceeded 98 percent of total revenue in each of the years from 2011 to 2014.
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ICE expects to save $150m by cutting overlapping costs in the first three years of the combination. Data services is ICE’s fastest-growing business, with revenues increasing from about $100 million in 2010 to an expected $700 million this year, according to UBS.
