ICE to Acquire MKTX: Initial Thoughts

Research evidence excerpt

ICE to Acquire MKTX: Initial Thoughts

IdeaMStrategic rationale: ICE is the most logical acquirer, in our view. MKTX would fill the

largest remaining gap in ICE’s fixed income ecosystem: institutional cash bond execution.

ICE already owns evaluated pricing and reference data covering more than 3m securities, a

large fixed income index franchise, ICE Clear Credit, the ICE Global Network, and the

BondPoint and TMC retail and wealth trading platforms. MKTX would add more than

2,100 institutional clients, established investment-grade, high-yield, and Eurobond

franchises, access to ~30 emerging market local currency markets, and growing portfolio,

block, and rates capabilities.

The combination would connect ICE’s retail and wealth liquidity with MKTX's institutional

network through a more common set of infrastructure and workflows. Clients currently

maintain separate connectivity to venues, data providers, and analytics platforms. We see

scope for ICE to consolidate parts of that stack, lowering the cost of connectivity and

reconciliation while creating a broader liquidity pool. Through this, ICE believes that

clients would be likely to focus less on the specific execution protocol and more on price

and available liquidity over time, increasing the value of a platform that can route across

retail, wealth, and institutional channels.

Upside Potential and Risks

Upside Potential: Revenue upside potential is more strategic and likely back-end

weighted. The transaction was underwritten to MKTX sustaining mid-single-digit top-line

growth, with more modest growth in the initial period and acceleration dependent on

ICE’s ability to stabilize US credit and expand the combined data and distribution

opportunity. While MKTX has invested selectively, ICE can bring greater resources to