US market operator IntercontinentalExchange (ICE) has signed a definitive agreement to acquire electronic OTC energy trading platform YellowJacket Software. Financial terms of the deal were not disclosed.
Formed in 2002 privately-held YellowJacket operates YJEnergy, an electronic trade negotiation platform that allows traders to aggregate and consolidate instant message-based communications and transaction details on a single screen.
The YJEnergy platform currently covers the OTC energy markets such as natural gas, power and crude oil markets. The system also supports the weather market and 80% of weather trading is conducted on the platform, according to the YellowJacket Web site.
"YellowJacket brings an innovative application that is uniquely positioned to meet the demand for electronic efficiencies in the OTC markets where complex options or structured products are involved," says ICE chairman and CEO Jeffrey Sprecher. "We see many applications of this technology beyond the energy and weather categories, particularly when coupled with ICE's expanding clearing capabilities."
ICE says the acquisition is expected to complete in February. The unit will be operated as a wholly owned subsidiary of ICE.
News of the acquisition comes as ICE reports a 32% rise in fourth quarter net income after volumes rose in the wake of record oil prices and following its acquisition of New York Board of Trade (Nybot).
The exchange posted fourth quarter net income of $64.7 million, compared to $49 million a year ago. Fourth quarter revenue came in at $159.3 million, a 67% rise on last year's $95.2 million.