Nasdaq Inc. (NDAQ) agreed Monday Monday to buy risk management and regulatory software group Adenza from private equity group Thoma Bravo for around $10.5 billion.
Nasdaq said the cash-and-stock deal will likely boost revenues in its 'solutions' division by around six percentage points this year while adding to overall profit margins and contributing around $300 million in annual pre-tax cash flows.
Nasdaq will pay $5.75 billion in cash, as well as 85.6 million in common shares for Adenza, which helps financial institutions with both regulatory reporting, market digitization and cloud migration. Thoma Bravo managing partner Holden Spaht will run the division, with the private equity group ultimately retaining a 14.9% stake.
“This is an exceptional opportunity to acquire a leading software company that enhances Nasdaq’s position at the heart of the global financial system,” said Nasdq CEO Adena Friedman. “The acquisition of Adenza brings together two world-class franchises steeped in market infrastructure, regulatory, and risk management expertise at a time when financial institutions are navigating some of the most complex market dynamics in history."
"Nasdaq aspires to be that partner every day, and with Adenza we can offer an even broader range of mission-critical solutions that enhance the liquidity, transparency, and integrity of the world’s financial system," she added.
Nasdaq shares were marked 9.77% lower in early Monday trading immediately following news of the deal to change hands at $52.18 each.
"Since the implementation of Dodd-Frank in 2010, banks have increased their compliance costs by more than $50 billion per year," said Nasdaq President Tal Cohen. "With Adenza, we will have a more complete suite of essential software and technology solutions that make managing risks and complying with regulations simpler and more efficient for our clients."
