3. ICE
Company Overview
Founded in 2000 in Atlanta, GA
Electronic trading platform
OTC energy markets
Agenda | Company Overview | Intrinsic Valuation | Relative Valuation | Recommendation
4. DCF Overview | Assumption & Estimates
GOAL: Implement a Discounted Cash Flow analysis in order to get the intrinsic value of the firm
Enterprise Value: (Share Price x Shares Outstanding) + Market Value of Debt
Equity Value Per Share: (Enterprise Value – Market Value of Debt)/Shares Outstanding
*The team used 1Q16-3Q16 to forecast 4Q16
Forecast Period 2016* - 2025
Discount Rate/WACC 6.24%
Current Price (as of 12/04/2016) $56.65
ICEAgenda | Company Overview | Intrinsic Valuation | Relative Valuation | Recommendation
6. Growth Rate 2%
Discount Rate/WACC 2%
Implied Discounted Terminal Value $24,667,289,000
Projected 2025 EBITDA $5,165,578,000
Industry Average EBITDA* 11.159x
Implied Discounted Terminal Value $31,471,344,000
Stage #2 | Implied TV
Perpetuity Method
EBITDA Multiple Method
ICE
*Intercontinental Exchange FY2015 EV/EBITDA: 4.628x
Agenda | Company Overview | Intrinsic Valuation | Relative Valuation | Recommendation
7. Total Enterprise Value $38,846,368,000
Less Market Value of Debt ($158,492,000)
Divided by Shares Outstanding 560,000,000
Implied Equity Value Per Share $69.09
Total Enterprise Value $45,650,423,000
Less Market Value of Debt ($158,492,000)
Divided by Shares Outstanding 560,000,000
Implied Equity Value Per Share $81.24
Implied Equity Value Per Share
Perpetuity Method (2%)
EBITDA Multiple Method (11.159x)
ICEAgenda | Company Overview | Intrinsic Valuation | Relative Valuation | Recommendation
11. ICE
Relative Valuation | EBITDA Multiples
16.88
11.97
4.628
11.159
0
2
4
6
8
10
12
14
16
18
CME NDAQ ICE Industry Average
EV/EBITDA 2015
CME NDAQ ICE Industry Average
Agenda | Company Overview | Intrinsic Valuation | Relative Valuation | Recommendation
12. Relative Valuation | Forward P/E Ratio
Agenda | Company Overview | Intrinsic Valuation | Relative Valuation | Recommendation
ICE
24.6
15.32
22.02
20.22
0
5
10
15
20
25
30
CME NDAQ ICE (Predicted) Industry Average
Forward P/E Ratio 2015
13. $56.65
Current Price
(as of 12/04/2016)
$52.04
Implied Price
P/E Ratio based on
industry average
Difference: ($4.61)
$63.31
Implied Price
P/E Ratio based on
industry leader
Difference: $6.66
Current Valuation vs. Implied Relative Valuation
Recommendation Based on Implied Relative Valuation: BUY
ICEAgenda | Company Overview | Intrinsic Valuation | Relative Valuation | Recommendation
14. Final Recommendation
Final Recommendation: BUY
ICEAgenda | Company Overview | Intrinsic Valuation | Relative Valuation | Recommendation
$56.65
$69.09
$81.24
$52.04
$63.31
30 40 50 60 70 80 90
Current Price
DCF - Perpetuity Method
DCF - EBITDA Method
Comps - P/E Industry AVG
Comps - P/E Industry Leader
Share Price Comparison