NEW YORK — Nasdaq announced it has agreed to acquire International Securities Exchange (ISE) from Deutsche Borse Group for $1.1 billion.
ISE is a New York-based operator of three electronic options exchanges. The acquisition allows Nasdaq to improve efficiencies for clients, broaden its technology offering, and provides the capability within the equity options industry to innovate and experiment. The transaction is expected to be accretive to Nasdaq earnings within 12 months of closing. Nasdaq does not expect a material impact on financial leverage or capital return strategy.
ISE operates three electronic options exchanges: ISE, ISE Gemini and ISE Mercury. ISE’s exchanges serve as the venues for more than 15% of trading in U.S. options. The deal is expected to close in the second half of 2016.
“The equities options business has been core to our long-term strategy, and we believe an essential component to the strength of the Nasdaq franchise,” said Bob Greifeld, Nasdaq, CEO. “I believe this transaction advances our ambitions with all our stakeholders, including clients and shareholders.”
Mr. Greifeld continued, “Our industry-leading INET technology, and our widespread use of a multicore system, will be leveraged to enhance the trading experience for all clients. This will allow Nasdaq to provide higher throughput and lower latency systems to clients, while increasing operational efficiencies and decreasing operational costs.”
By utilizing its existing options platforms and INET technology, along with ISE’s complementary strengths, Nasdaq will look to build on its robust offerings to provide greater breadth and depth of products and services that will benefit market participants.
Following the close of the transaction, Nasdaq will operate PrecISE Trade®, an award-winning front-end order and execution management system for trading options and stock-option combinations. PrecISE lets traders submit, monitor, alter, and cancel orders; display the NBBO and BBO of options on ISE exchanges; and route orders to all options exchanges via execution brokers.
Nasdaq will fund the acquistion with a combination of cash and debt.