Nasdaq Expands Fintech Presence with $10.5 Billion Adenza Acquisition.
June 12, 2023: Nasdaq, a significant stock exchange operator, is taking a big step towards becoming more focused on technology by acquiring software firm Adenza for $10.5 billion. This is the largest acquisition Nasdaq has made and reflects its desire to expand its tech offerings.
The deal involves Nasdaq paying $5.75 billion in cash and issuing 85.6 million shares of its common stock to Thoma Bravo, the owner of Adenza. This acquisition aims to enhance the stock exchange operator’s growth potential by providing essential software and technology solutions that simplify and streamline risk management and regulatory compliance for its clients.
Nasdaq has been actively diversifying its business to reduce its dependence on market fluctuations. Under the leadership of CEO Adena Friedman, the company has been focusing on areas like anti-financial crime software and environmental, social, and governance (ESG) services. These non-market units now generate around three-quarters of Nasdaq’s total revenue.
The acquisition of Adenza will improve the medium-term growth prospects for Nasdaq’s Solutions Businesses, which develop financial software for investors. The organic revenue growth outlook is expected to increase from 7%-10% to 8%-11%.
To fund the cash portion of the transaction, Nasdaq has secured bridge financing, and it plans to issue approximately $5.9 billion in debt between the signing of the deal and its closing, which is expected to take place within the next six to nine months.
According to Nasdaq, Adenza, a software provider used by banks and brokerages, is projected to generate approximately $590 million in annual revenue by 2023.
In the advisory role, Goldman Sachs & Co. LLC and J.P. Morgan Securities LLC assist Nasdaq, while Qatalyst Partners LP is the lead financial advisor to Thoma Bravo and Adenza.
This acquisition is a significant move for Nasdaq as it continues to expand its technological capabilities and diversify its revenue streams.
