The Intercontinental Exchange Group (ICE) has announced a $400 million deal with Virtu Financial to acquire the BondPoint fixed-income trading venue, further extending the exchange’s presence in the bond-trading space.
The announcement comes hot on the heels of the completion of a similar deal that saw ICE acquire the fixed-income index platform of Bank of America Merrill Lynch, which will be offered alongside its existing ICE US Treasury indices and ICE’s index services.
BondPoint provides electronic fixed-income trading solutions to both the buy side and sell side, accessing centralized liquidity and automated trade execution services through its alternative trading system (ATS). The addition of the platform further extends ICE’s fixed-income portfolio, which includes the assets of former market data provider Interactive Data Corp., which the exchange acquired in 2015 as part of a sizable data-related shopping spree.
“We believe adding BondPoint’s capabilities to our data and technology infrastructure will allow us to continue to innovate for our customers as the fixed income markets evolve,” said ICE chairman and CEO Jeffrey Sprecher, in a statement.
“After a thorough analysis, we concluded that BondPoint is a unique asset better suited to operate outside of Virtu’s core operations,” said Virtu Financial chief executive, Douglas Cifu, said in a separate statement. “Following a competitive process, ICE distinguished itself as a strong and stable global organization that could provide the best home for BondPoint, its customers, and its employees.”
The deal, pending regulatory approval is expected to close in Q1 2018. Spokespeople for ICE and Virtu Financial declined to comment further.
Chris Allen, global exchanges and capital markets analyst at Rosenblatt Securities, said in a note: “These are somewhat unique assets, but both prices paid seem somewhat full to us based on currently available information. But we can see the merits of both investments from a strategic perspective longer-term. Near-term, these investments will likely curtail buyback activity.”
Former KCG executive Jim Greco, in his industry newsletter, predicted in August that ICE would be the likely suitor for BondPoint, citing synergies between the firm and ICE’s New York Stock Exchange subsidiary, which also operates a fixed-income platform.
ICE’s acquisition of BondPoint is the latest in a spate of deals across the fixed-income space, sparked by Bloomberg’s acquisition of the intellectual property of Barclays’ risk and portfolio analytics solution Point, with a number of investment banks offloading risk and portfolio analytics systems to vendors and exchanges.
In March this year, FactSet announced the acquisition of Paris-based performance measurement and attribution platform provider BISAM, as part of its ongoing plan to better realign its enterprise offering for buy-side clients seeking to reduce total cost of ownership without diluting technical capabilities.
A month later, UK-based StatPro confirmed that it was set to acquire UBS Delta, UBS’ risk and performance analytics service, while Citigroup sold off the Yield Book fixed-income analytics business and the Citi Fixed-Income Indices to London Stock Exchange in a deal worth $685 million in June.
It’s a trio of problems: Mifid II’s data problem; blockchain projects stalled; and data quality issues for machine learning.Subscribe to Weekly Wrap emails