ISE Acquires Assets Of Longitude: Innovative Derivatives Auction Platform And Technology

The International Securities Exchange (NYSE: ISE) announced today that it has acquired the intellectual property and other related assets of Longitude, Inc, inventor of a proprietary and patented technology that uses parimutuel principles to run derivatives auctions that aggregate liquidity and produce fair and efficient market-driven prices.

The new entity, to be named Longitude LLC, will become an operating unit of ISE, which will retain majority-ownership in partnership with Goldman Sachs, which is increasing its pre-existing minority stake. Terms of the transaction have not been disclosed.

Since late 2002 Goldman Sachs has used the Longitude platform to clear risk and build liquidity for a wide range of auction products. Currently, the products offered include options on economic data in partnership with the Chicago Mercantile Exchange and options on certain energy market statistics in partnership with ICAP Energy and the New York Mercantile Exchange. Upon closing, the new Longitude LLC will service these existing auction markets.

"ISE has acquired Longitude, in partnership with Goldman Sachs, to fulfill our vision of delivering expanded product offerings for the industry that demonstrate our commitment to growth and innovative technology," said David Krell, President and Chief Executive Officer of ISE. "We believe that Longitude's platform complements ISE's existing infrastructure and technologies and diversifies the suite of capabilities that we can deliver to the market."

Longitude's platform facilitates development of event contracts and other new derivatives contracts. This business will report into ISE's Corporate Initiatives division, which is headed by Thomas Ascher, Chief Strategy Officer. Tom Ascher noted that "ISE continues to embrace new technology to expand our product delivery platform for innovative derivatives products. We are committed to leveraging Longitude's proprietary, patented technology to support and build upon the exciting suite of products which have already been developed."

Laurie Ferber, Managing Director and head of Goldman Sachs economic derivatives group, said "As one of the early adopters of Longitude's unique risk transfer platform, we are excited about the ISE's commitment to these markets and look forward to working with them in bringing added innovation to our existing markets and new outlets. Goldman Sachs is committed to expanding the range of product offerings available to investors to help them hedge their portfolios and manage the risks associated with macro-economic events."