Moving ahead with its restructuring strategy,
IntercontinentalExchange Group Inc.
), or ICE Group, raised about €1.4 billion (or $1.9 billion) from
the initial public offering (IPO) of Euronext NV, which began
trading from Jun 20 under the symbol 'ENX' in the Euronext stock
exchanges of Paris, Amsterdam and Brussels.
Furthermore, ICE Group signed a pact with ULLINK to vend of two
more units of NYSE Technologies, which was acquired as part of NYSE
Euronext Inc. acquisition in Nov 2013. ULLINK is a France-based
firm that offers electronic trading software and connectivity
services to the exchanges. Notably, ULLINK is supported by HG
Per the agreement, ULLINK has agreed to buy Metabit and NYFIX
Inc. for undisclosed terms and value. Awaiting regulatory
approvals, the deal is expected to culminate by Sep 2014. ICE Group
appointed Evercore as its exclusive financial advisor for the deal,
while Shearman & Sterling LLP was the legal advisor.
NYSE had acquired NYFIX in Nov 2009 for $144 million. NYFIX
Marketplace provides exhaustive technology solutions to over 1,000
trading counterparties across financial services markets
On the other hand, Tokyo-based Metabit was acquired by NYSE in
Sep 2011 to accelerate NYSE's market access products growth in
Asia. Metabit offers high quality market access products through
more than 140 trading firms across Japan and Asia.
Going forward, the acquisition of Metabit and NYFIX is expected
to expand ULLINK's scale of operations. The deal will also
strengthen the buyer's competitive position as a leading and
comprehensive global provider of trading technology products and
Consolidation on Track
Since the NYSE acquisition, ICE Group aimed to operate as a
start-up and concentrate on consolidating its operations within the
interest-rate futures and U.S. stock exchanges acquired through the
NYSE Euronext deal. The business centralization will help the
company gain efficiencies of scale, reduce cost and amplify
Subsequently, the company contemplated the sale of the
non-exchange technology businesses acquired through NYSE - NYFIX,
SuperFeed, Wombat Financial Software and Metabit. Last week the
company also announced the sale of Wombat and SuperFeed to SR Labs
for an undisclosed value. [Read:
ICE Group Vends NYSE's Tech Unit as Per Growth
Apart from the Euronext divestment, ICE Group has plans to
terminate NYSE Liffe's New York Portfolio Clearing (NYPC)
operations from mid-2014 onwards.
ICE Group's aggressive efforts to vend non-exchange related
businesses are also related to its debt burden. Notably, the
company's debt-to-EBITDA rose to about 2.56x from the $11 billion
NYSE acquisition. Going ahead, management aims to improve this
leverage to at least 1.5x in the next 1.5 years by debt reduction
and alongside, improve cash flows for long-term growth investments
and incremental shareholder returns.
Currently, ICE Group carries a Zacks Rank #3 (Hold). Some
better-ranked financial stocks worth considering include
Euronet Worldwide Inc.
Ladder Capital Corp
VeriFone Systems Inc.
). All these stocks sport a Zacks Rank #1 (Strong Buy).
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INTERCONTNTLEXC (ICE): Free Stock Analysis
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EURONET WORLDWD (EEFT): Free Stock Analysis
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