Nasdaq, the leading global stock exchange operator, announced on Monday its plans to acquire software firm Adenza for a staggering $10.5 billion. This purchase marks Nasdaq’s largest acquisition to date as the company accelerates its transformation into a more technology-focused enterprise.
Under the leadership of Chief Executive Officer Adena Friedman, Nasdaq aims to diversify its operations and expand its technological capabilities. The acquisition of Adenza, which is currently owned by Thoma Bravo, will play a crucial role in achieving these goals.
The deal consists of a cash payment of $5.75 billion and the issuance of 85.6 million Nasdaq common stock. As part of the agreement, Nasdaq plans to grant approximately 14.5% of its outstanding shares to the owners of Adenza, who are primarily affiliated with Thoma Bravo.
Adenza, renowned for its software solutions used by banks and brokerages, is projected to generate approximately $590 million in revenue for 2023, according to Nasdaq’s estimates. Excited about the acquisition, Tal Cohen, President of Market Platforms at Nasdaq, said, “With Adenza, we will be able to provide an expanded suite of essential software and technology solutions that make managing risks and complying with regulations for our clients simpler and more effective.
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To fund the cash portion of the transaction, Nasdaq has secured fully committed bridge financing. Furthermore, the company intends to issue approximately $5.9 billion in debt between the signing of the agreement and the deal’s expected closure, which is anticipated to take place within the next six to nine months.
In recent years, Nasdaq has actively pursued a strategic shift away from its traditional market-sensitive exchange operations, instead placing greater emphasis on its financial software offerings for institutional investors.
This move has already shown promising results for the company. In April, Nasdaq reported first-quarter profits that surpassed Wall Street estimates, largely driven by robust demand for its anti-financial crime software. The success of these financial software ventures was further bolstered by Nasdaq’s $2.75 billion acquisition of Verafin, a leading anti-financial crime software firm.
Despite the company’s positive trajectory, Nasdaq shares experienced a slight decline of 1.4% during premarket trading following the announcement of the Adenza acquisition.
By diversifying its business and expanding its suite of software solutions, Nasdaq aims to solidify its position as a key player in the ever-evolving financial technology landscape. The acquisition of Adenza represents a significant milestone in Nasdaq’s journey toward becoming a more tech-focused company, ultimately providing enhanced risk management and regulatory compliance solutions for its clients.
