Nasdaq, Inc. (Nasdaq: NDAQ), a technology company serving the global financial system, today announced it has entered into a definitive agreement to acquire Adenza, a provider of mission-critical risk management and regulatory software to the financial services industry, from Thoma Bravo, a software investment firm, for $10.5 billion in cash and shares of common stock.
The acquisition accelerates Nasdaq’s strategic vision “to become the trusted fabric of the world’s financial system.” Upon the closing of the transaction, Holden Spaht, a Managing Partner at Thoma Bravo, is “expected to be appointed to Nasdaq’s Board of Directors, which will be expanded to twelve members.”
Adenza is described as “a fast-growing software company created through the combination of two highly respected and well-recognized global brands – Calypso and AxiomSL. Calypso serves capital markets participants with end-to-end treasury, risk, and collateral management workflows, and AxiomSL supports financial institutions with leading regulatory and compliance software.”
The addition of Adenza “to Nasdaq’s trusted brand and platform of mission-critical solutions complements Nasdaq’s Marketplace Technology and Anti-Financial Crime solutions and significantly enhances Nasdaq’s offerings across an even broader spectrum of regulatory technology, compliance, and risk management solutions.”
With Adenza, Nasdaq will also be able “to provide comprehensive support to financial institutions, establishing a multi-asset class, full trade lifecycle platform with unmatched regulatory technology solutions.”
Adenza reportedly brings “an attractive financial profile, with approximately $590 million of 2023E revenue, organic revenue growth1 of approximately 15%, annual recurring revenue growth of 18%, and an adjusted EBITDA margin1 of 58%.”
The company has “a loyal and growing client base, with 98% gross retention, 115% net retention, and a durable mix of approximately 80% recurring revenue.”
The addition of Adenza is “projected to enhance Nasdaq’s already strong financial profile by growing Solutions Businesses revenue2 from 71% of total revenue today to 77% in 2023E, increasing adjusted EBITDA margin to 57%3, and adding approximately $300 million of annual unlevered pre-tax cash flow.”
Adena Friedman, Chair and Chief Executive Officer, Nasdaq, said:
“This is an exceptional opportunity to acquire a leading software company that enhances Nasdaq’s position at the heart of the global financial system. 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. From fast-evolving global regulations to rapidly increasing pressures to modernize infrastructure, our clients are seeking trusted partners equipped to support them in this challenging environment. 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.”
Tal Cohen, President of Market Platforms, Nasdaq, said:
“The addition of Adenza accelerates our ambition to modernize and advance the world’s economies. It also introduces a fast-growing $10 billion serviceable addressable market to Nasdaq. Since the implementation of Dodd-Frank in 2010, banks have increased their compliance costs by more than $50 billion per year4. 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. With complementary capabilities and geographic footprints, we can see a clear path to deepening our client relationships globally with leading end-to-end platforms across risk, trading, and regulatory reporting.”
Didier Bouillard, Chief Executive Officer at Adenza, said:
“This transaction is an endorsement of the entire Adenza team and what we have built with Thoma Bravo, from our market-leading products to the immense value we have delivered for our customers. Together with Nasdaq, we will be in an even stronger position to take advantage of the growing market opportunities and to provide customers with expanded solutions to solve their most complex problems.”
For more details on this update, check here.