Nasdaq deepens fintech push with $10.5 billion Adenza deal

(Reuters) -Nasdaq on Monday said it will buy Thoma Bravo-owned software firm Adenza for $10.5 billion, in what would be the exchange operator’s biggest acquisition as it speeds up its push to become a more tech-focused company.

The purchase, consisting of $5.75 billion in cash and 85.6 million shares of Nasdaq common stock, is expected to help growth at the stock exchange operator, which is trying to diversify under Chief Executive Officer Adena Friedman.

Nasdaq said it intends to issue about 14.5% of its outstanding shares to the owners of Adenza, which is controlled by Thoma Bravo.

Adenza, which makes software used by banks and brokerages, is expected to hit about $590 million in annual 2023 revenue, Nasdaq said.

“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,” said Tal Cohen, president of Market Platforms at Nasdaq.

The exchange operator also said it has received fully committed bridge financing for the cash part of the transaction, and plans to issue about $5.9 billion of debt between the signing and the closing of the deal, expected within six to nine months.

The company has increasingly looked to move its business away from market sensitive exchange operations and chosen to lean into the financial software offerings for institutional investors.

In April, Nasdaq posted first-quarter profit that beat Wall Street estimates on the back of strong demand for its anti-financial crime software. The upbeat results came on the back of the company’s $2.75 billion deal for anti-financial crime software firm Verafin.

Nasdaq shares were down 1.4% in premarket trading.