Shares of Ferguson Enterprises Inc. (NYSE:FERG) climbed sharply in after-hours trading Friday, rising about 8% after S&P Dow Jones Indices said the company will be added to the S&P 500.
The index manager indicated Ferguson will take the place of Electronic Arts Inc. (NASDAQ:EA) in the S&P 500 effective prior to the market open on Wednesday, August 5. The change coincides with an investor group made up of the Public Investment Fund, Silver Lake and Affinity Partners moving to acquire Electronic Arts in a transaction the announcement says is expected to close soon, subject to final conditions.
S&P additions often prompt buying from funds and exchange-traded funds that track the benchmark, since those vehicles must purchase shares of companies newly included in the index. Ferguson is classified in the Industrials sector under the Global Industry Classification Standard.
In a separate update, S&P Dow Jones Indices said ADI Global Distribution Inc. (NYSE:ADIG) will be added to the S&P SmallCap 600 effective prior to the opening of trading on Tuesday, August 4. ADI is being spun off from S&P SmallCap 600 constituent Resideo Technologies Inc. (NYSE:REZI) in a transaction scheduled to be completed on August 4.
Following that change, ADI Global Distribution will replace Hertz Global Holdings Inc. (NASDAQ:HTZ) in the S&P SmallCap 600 effective prior to the opening of trading on Wednesday, August 5. S&P Dow Jones Indices said Hertz is no longer representative of the small-cap market space.
The two announcements together reflect routine index maintenance tied to corporate transactions: a takeover prompting the removal of an S&P 500 constituent and a spin-off driving the addition and rebalancing of the SmallCap 600. Market participants that replicate these indices will adjust holdings according to the effective dates provided by S&P Dow Jones Indices.