NDAQ - Nasdaq to buy Adenza in a $10.5B cash and stock deal

2023-06-12 06:26:28 ET

• Nasdaq ( NASDAQ: NDAQ ) is acquiring Adenza, a financial software maker in a $10.5B cash-and-stock deal from Thoma Bravo.
• The transaction value comprises of $5.75B in cash and 85.6M shares of Nasdaq common stock.
• According to the terms, Thoma Bravo receives a 14.9% share in Nasdaq as part of the acquisition.
• If the deal is completed, it would be the largest in Nasdaq history, and Holden Spaht, a Managing Partner of Thoma Bravo, will be named to Nasdaq's Board of Directors, which will be increased to twelve members.
• The acquisition is projected to boost Nasdaq's ARR as a percentage of 2023 pro forma total revenue to 60%, up from 56% in 2022, and Nasdaq's Solutions Businesses as a percentage of 2023 pro forma total revenue to 77%, up from 71% today.
• On a pro forma basis, the deal increases Nasdaq's adjusted EBITDA margins from 55% to 57% in 2023.
• The acquisition is said to be expected to improve Nasdaq's growth, profitability, and revenue quality, as well as produce non-GAAP diluted EPS accretion by the end of the second year.
• Nasdaq expects to achieve $80M in run-rate net expense synergies by the end of year two, as well as $50M in the medium term and $100M over the long term.
• The company has secured fully committed bridge financing for the cash part of the transaction and intends to issue approximately $5.9B in debt between signing and close to replace the bridge commitment.
• “The addition of Adenza accelerates our ambition to modernize and advance the world’s economies,” Tal Cohen, President of Market Platforms at Nasdaq, said. “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 year. 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.”

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