NYSE owner to acquire Interactive Data from Silver Lake and Warburg Pincus

Intercontinental Exchange (ICE) is acquiring Interactive Data (IDC) from private equity firms Silver Lake and Warburg Pincus in a cash and stock deal valued at about $5.2bn (£3.39bn,€4.7bn). It would pay $3.65bn in cash and the balance in ICE stock to conclude the deal.

The deal has been approved by the boards of both the companies and is expected to close by the end of the year. The acquisition of the financial data and analytics provider will help ICE to grow its market data business by adding technology platforms and increasing new data and valuation services. ICE said it expected cost synergies of $150m over a three-year period due to the deal.

According to Burton-Taylor International Consulting, post the deal, ICE will be the third largest financial market data provider, after Bloomberg and Thomson Reuters. ICE, which is valued at about $27.5bn, owns the New York Stock Exchange (NYSE) apart from ten other exchanges and seven clearing houses.

It overbid other interested suitors such as Nasdaq and Markit by several hundred million dollars to clinch IDC, which also drew interest from many bidders, because of its products in the bond pricing vertical that none of its peers have.

The transaction reflects ICE's view of the growing opportunity to make money from bond-price data, which is among the best-known products of IDC as the buying and selling of corporate debt shifts to electronic marketplaces.

Silver lake and Warburg Pincus acquired Interactive Data in July 2010, following which IDC's shareholders were entitled to receive $33.86 in cash for each share of common stock owned. This also led to IDC's delisting from the NYSE. Both the PE firms now stand to triple their investments from the ICE deal.