Intercontinental Builds Out Asset Pricing With Two Acquisitions

  • ICE buys fixed-income and swap-pricing units from McGraw Hill
  • Data services is fastest growing part of ICE's business

Intercontinental Exchange Inc. added to its growing data business with the purchase of two asset-pricing services from McGraw Hill Financial Inc.

ICE is buying Standard & Poor’s Securities Evaluations Inc. and Credit Market Analysis for an undisclosed amount, according to a statement Tuesday. The first business bolsters ICE’s ability to supply bond-price data to customers, and CMA helps users value over-the-counter derivatives such as credit-default swaps.

The deal with McGraw Hill follows ICE’s October $5.2 billion agreement to buy Interactive Data Holdings Corp., which also provides price data on fixed-income securities. Though ICE was founded as an exchange -- a venue for traders to come together to buy and sell assets -- it’s expanded into the increasingly attractive market data industry. Revenue from data-service fees grew to $871 million at ICE last year, up 26 percent from 2014 for the biggest gain among the company’s units.

McGraw Hill’s S&P Securities Evaluations unit will augment the core of Interactive Data’s business: fixed-income pricing. CMA was sold to McGraw Hill in 2012 by Intercontinental rival CME Group Inc. for an undisclosed price.

“With rising demand for independent data in the global fixed income and credit markets, this transaction will support the need for innovation and increased risk management and valuation services,” ICE Chief Executive Officer Jeffrey Sprecher said in the statement.

ICE, which runs some of the world’s biggest futures markets as well as the New York Stock Exchange, has had a busy week on the acquisition front. On Tuesday it confirmed it’s exploring whether to try to buy London Stock Exchange Group Plc, scuttling the U.K. company’s talks with Deutsche Boerse AG to form the dominant European exchange operator.

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