- Adenza offers software tools that aid financial institutions in ensuring their business operations comply with regulations.
- Adenza’s technology is said to facilitate the management of approximately USD 25 trillion worth of assets by over 60,000 financial professionals.
Nasdaq Inc. has unveiled its intention to purchase Adenza Group Inc., a prominent financial software provider, in a substantial acquisition agreement valued at USD 10.5 billion.
To complete the transaction, the stock exchange operator will raise about USD 5.9 billion in debt. Nasdaq is planning to purchase Adenza for USD 5.5 billion in cash, with the remaining USD 85.6 million being paid for by Nasdaq’s shares. According to the company, these shares make up about 15% of its outstanding stock.
The Chief Executive Officer of Nasdaq, Adena Friedman, said, “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.”
In addition to running its stock exchange, Nasdaq manages more than six other financial markets in the United States and Europe. It also offers software for sale to other financial institutions. The latter part of Nasdaq’s business will thrive due to the acquisition of Adenza.
Adenza offers software tools that aid financial institutions in ensuring their business operations comply with regulations. These tools can collect data related to an organization’s financial activities, detect signs of compliance issues, and present the results in an easy-to-understand dashboard. Additionally, Adenza’s software simplifies associated tasks, such as verifying data accuracy in a dashboard.
Adenza also provides applications that assist financial institutions in executing trades. Among its software offerings, the company offers a platform that enables banks to access market data and execute stock purchases. Additionally, Adenza’s software portfolio features a simulation tool that allows users to evaluate the effectiveness of new investment strategies before putting them into action.
Adenza has a customer base comprising six of the world’s ten largest asset management firms. The company’s technology is said to facilitate the management of approximately USD 25 trillion worth of assets by over 60,000 financial professionals.
Thoma Bravo, the private equity firm, established Adenza in 2021 by merging two software providers, Calypso and AxiomSL. Calypso was acquired by Thoma Bravo in 2021 for a reported USD 3.7 billion, while most of AxiomSL’s shares were purchased for USD 2 billion the previous year. As a result, Thoma Bravo is expected to earn a significant return on investment by selling Adenza to Nasdaq for USD 10.5 billion.
By acquiring Adenza, Nasdaq aims to expand its software business. Thoma Bravo revealed that Adenza generates approximately USD 590 million in annual sales and has a revenue growth rate of 15%.
Nasdaq anticipates the acquisition will create cross-selling opportunities, enabling Adenza’s top line to expand. The stock exchange operator aims to achieve “run-rate revenue synergies” of USD 50 million in the medium term and USD 100 million in the long term. Nasdaq expects the deal to increase its serviceable addressable market by USD 10 billion.
In addition, the company anticipates that the acquisition will contribute to its overall profitability. Following the deal’s completion, Nasdaq projects a 2% margin improvement in its adjusted EBITDA (earnings before interest, taxes, depreciation, and amortization). This boost in profitability can be attributed, in part, to the expected realization of USD 80 million in annual cost synergies.
Nasdaq has set a target to finalize the transaction within six to nine months.