Intercontinental Exchange, Inc . ICE has recently completed the buyout of Virtu BondPoint from Virtu Financial for an aggregate amount of $400 million in cash. The buyout will enable the acquirer to boost fixed income execution services as well as extend and further strengthen its capability to cater to the growing global demand for efficiency and information.
Details of the Transaction
On Oct 24, 2017, Intercontinental Exchange inked a deal with Virtu Financial to purchase Virtu BondPoint. The acquired company is an industry-leading provider of electronic fixed income trading solutions for the buy-side and sell-side providing access to centralized liquidity and automated trade execution services via its ATS that links more than 500 financial services firms. On completion of the buyout, BondPoint will be part of Intercontinental Exchange's fixed income trading and data solutions, which comprises ICE Credit Trade for dealer-to-dealer corporate bond trading and BondEdge for bond portfolio analytics to name a few.
Benefits of the Acquisition
Addition of BondPoint to Intercontinental Exchange's portfolio is likely to help the latter continue with its innovation efforts for its client as fixed income markets develop. Intercontinental Exchange remains optimistic about the addition of BondPoint and the supporting solutions, which in turn might allow the acquirer's clients to make transactions with confidence in an increasingly transparent, automated and data-driven marketplace.
The BondPoint buyout is expected to enhance Intercontinental Exchange's footprint in the global bond markets. Apart from expanding its presence in the fixed income markets, BondPoint's all-to-all trading platform and its leading position in the retail channel will lend Intercontinental Exchange with the opportunity to engage new customers and expose them to its wide range of risk management tools and content.
Inorganic Growth Story
Intercontinental Exchange's continued efforts in pursuing prudent acquisitions have allowed the company to achieve global diversification, while tapping new opportunities in the emerging economies. It is important to note that Intercontinental Exchange has a stellar track record of buyouts, which include Interactive Data Corporation, Trayport, Standard & Poor's Securities Evaluations, Inc., to name a few. Such strategic buyouts have not only expanded growth of the company but have also resulted in achieving expense synergies. Moreover, the Intercontinental Exchange's solid capital position has given the required support to pursue such strategic initiatives and is expected to do the same in the near term.
Zacks Rank and Share Price Movement
Intercontinental Exchange holds a Zacks Rank #2 (Buy). Shares of Intercontinental Exchange have rallied 22.1% in a year's time, underperforming the industry 's rise of 26.6%. However, we expect improving data revenues, average daily volume growth and robust capital position to turn the stock around in the near term.
Other Stocks to Consider
Investors interested in other top-ranked stocks from the finance sector can also consider Manulife Financial Corporation MFC , Primerica, Inc. PRI and Cigna Corporation CI , each holding a Zacks Rank of 2. You can see the complete list of today's Zacks #1 Rank (Strong Buy) stocks here .
Manulife Financial provides financial advice, insurance and wealth and asset management solutions for individuals, groups and institutions in Asia, Canada and the United States. The company came up with positive surprises in all the last four quarters with an average beat of 10.75%.
Primerica distributes financial products to middle-income households in the United States and Canada. The company pulled off positive surprises in two of the last four quarters with an average beat of 0.96%.
Cigna provides insurance and related products and services in the United States and internationally. The company delivered positive surprises in all the trailing four quarters with an average beat of 14.56%.
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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.