June 12 (Portal) – Nasdaq (NDAQ.O) announced on Monday that it will buy Thoma Bravo-owned software company Adenza for $10.5 billion. This would be the exchange operator’s biggest acquisition as it accelerates its efforts to become a more tech-centric player. focused company.
Nasdaq shares extended losses to trade 8.4% lower at $53 before the IPO.
The purchase, which consists of $5.75 billion in cash and 85.6 million shares of Nasdaq common stock, is intended to support the exchange operator’s growth as it seeks to diversify under CEO Adena Friedman.
“With Adenza, we have a more comprehensive suite of key software and technology solutions that make risk management and regulatory compliance easier and more efficient for our clients,” said Tal Cohen, president of Market Platforms at Nasdaq, in a statement.
Under Friedman, Nasdaq has diversified more into businesses that are less affected by market volatility, such as B. Financial crime-fighting software and ESG services, with recurring revenue from non-market entities accounting for about three-quarters of total revenue.
The deal for Adenza comes after a year of volatility in capital markets that hurt U.S. listings and curbed lucrative listing fees for its exchanges after a record-breaking 2021.
According to Nasdaq, the acquisition of Adenza should increase the medium-term organic revenue growth prospects for its solutions businesses, which design and develop financial software for investors, from 7-10% to 8-11%.
It intends to issue approximately 14.5% of its outstanding shares to the owners of Adenza, which is controlled by Thoma Bravo.
Adenza, a maker of banking and brokerage software, is expected to have annual sales of about $590 million in 2023, Nasdaq added.
The exchange operator also said it has received fully committed bridge financing for the cash portion of the transaction and plans to incur approximately $5.9 billion in debt between signing and closing of the transaction, expected to be within six to nine months to go.
In April, Nasdaq reported earnings that beat Wall Street estimates on strong demand for its financial crime-fighting software. The positive results were due to the company’s $2.75 billion deal with financial crime-fighting software company Verafin.
Goldman Sachs & Co. LLC and JP Morgan Securities LLC are financial advisors to Nasdaq, while Qatalyst Partners LP is lead financial advisor to Thoma Bravo and Adenza on the transaction.
Reporting by Manya Saini in Bengaluru; Edited by Nivedita Bhattacharjee
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