Financial services corporation Nasdaq has splashed the whopping sum of $10.5 billion to acquire software firm Adenza, to deepen its push to become a more focused tech company.
The report reveals that the purchase consists of $5.75 billion in cash and 85.6 million shares of Nasdaq common stock, which is expected to aid the growth of the stock exchange company, as it diversifies its portfolio.
Speaking on the acquisition of Adenza, Nasdaq CEO Adena Friedman said,
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“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.”
Adenza Group, Inc., formerly known as Calypso Technology, is a software application provider that specializes in Capital Markets, Investment Management, Central Banking, Risk Management, Clearing, Collateral, and Treasury & Liquidity. Their integrated suite of trading and risk applications is used by banks and other financial companies.
With its headquarters in London and New York, Adenza has more than 60,000 users across the world’s largest financial institutions spanning global and regional banks, broker-dealers, insurers, asset managers, pension funds, hedge funds, central banks, stock exchanges and clearing houses, securities services providers and corporates. It has a strong client base, with 98% gross retention, 115% net retention, and a mix of approximately 80% recurring revenue.
Nasdaq stated that the acquisition of Adenza complements its marketplace technology and anti-financial crime solutions, and enhances its offerings across a broader spectrum of regulatory technology, compliance, and risk management solutions.
Reports disclose that Nasdaq CEO Friedman has been pushing the company into the tech space for some time now, expanding its role as a marketplace for trading that is reliant largely on trading volumes to thrive. The company has increasingly looked to move its business away from market-sensitive exchange operations and has chosen to lean into the financial software offerings for institutional investors.
With Adenza under its wing, Nasdaq, which operates three stock exchanges in the U.S. and seven in Europe, said it will be better positioned to provide comprehensive support to financial institutions across regulatory technology, compliance, and risk management. Nasdaq further revealed that it expects to close the deal within the next nine months.