NEW YORK IntercontinentalExchange Inc. (ICE), which is said to be in the hunt to buy the London Metal Exchange, is well positioned to make acquisitions due to its strong balance sheet, according to its top executives.
"We ended the quarter with nearly $1 billion in cash, no net debt, low leverage and access to a committed line of credit of $1.8 billion. As a result of our strong balance sheet and cash generation, we are well positioned to continue to invest in key strategic growth initiatives and expand our existing businesses," senior vice president and chief financial officer Scott A. Hill said during the Atlanta-based companys first-quarter earnings call Wednesday.
"I think there were companies that were mispriced to the upside, and the expectation is that there are some companies that were mispriced to the downside, and we would like to be opportunistic if those opportunities came along," Jeffrey C. Sprecher, chairman and chief executive officer, said during the call.
Hill pointed out the companys clearing capabilities, which market sources said would make ICE a good fit with the LME as the exchange is looking to develop its own clearing capacity. "Today, we are the only solution in the U.S. or Europe to have cleared even $1 trillion in notional value," Hill said.
Seventy-five percent of the LMEs shareholders must approve a sale of the exchange, according to AMM sister publication Metal Bulletin, with some sources valuing the LME as high as £2 billion ($3.24 billion).
ICE recorded first-quarter net income of nearly $147.9 million, up 14.7 percent from $12.9 million in the same period last year, on revenue that rose 9.2 percent to $365.2 million from $334.3 million.