Nasdaq’s $10.5 Billion Acquisition of Adenza Signals Focus on Technology: News Report

Nasdaq agreed on Monday to buy software firm Adenza, owned by Thoma Bravo, for $10.5 billion, in the largest acquisition to date by the stock exchange operator as it steps up its efforts to become a more focused company technology, reports News.ro citing the Reuters agency.

Nasdaq, like other stock exchanges, has made a series of acquisitions to diversify its technology and intellectual property portfolio after 2005 regulations opened the stock trading market to competition from brokerage firms.

Since then, Nasdaq bought Nordic markets owner OMX in 2007 for $3.7 billion, spent $1.1 billion on the International Stock Exchange in 2016, and acquired anti-crime software firm Verafin, in 2020, for $2.75 billion.

Adenza’s software is mainly used by banks and brokerage firms, and analysts said Nasdaq’s agreement to buy the company would help it diversify beyond its roots as a stock exchange operator.

Nasdaq shares fell nearly 10%. Investors saw the transaction as an expensive bet

As part of the transaction, Thoma Bravo will obtain a 14.9% stake in Nasdaq, making the private equity firm one of the largest shareholders of the exchange operator.

Holden Spaht, a managing partner at Thoma Bravo, is expected to be appointed to Nasdaq’s board of directors.

“The whole here as part of Nasdaq is worth more than the sum of its parts – there are revenue synergies with Nasdaq, there are expense synergies and Nasdaq is a great global brand that I think will accelerate Adenza sales,” Spaht said in an interview.

Nasdaq shares fell nearly 10% to $52.39 as investors saw the deal as an expensive bet.

Nasdaq valued Adenza at about 31 times the company’s earnings before interest, taxes, depreciation and amortization (EBITDA) this year and is raising about $5.9 billion in debt financing to support the acquisition.