Nasdaq Completes $10.5 Billion Adenza Deal In Fintech Bet

(Bloomberg) -- Nasdaq Inc. completed its biggest ever acquisition, adding software provider Adenza to help transform the trading and markets firm into a full-fledged financial-services company.

The exchange, which agreed to buy Adenza from Thoma Bravo for $10.5 billion in June, will fold Adenza's management and sales team into a newly formed financial-technology division, the company said in a statement Wednesday. That business now sits alongside the market-services and the capital access platforms divisions, as part of an overhauled structure following the acquisition. 

“We are going to where the puck is going, and not where it is today,” Chief Executive Officer Adena Friedman said in an interview. “If we do this successfully, and we have a good road map, it repositions Nasdaq as a scaled financial-technology provider.”

Nasdaq President Tal Cohen will lead both the market-services and financial-technology segments, while Nelson Griggs remains president of capital access platforms, people familiar with the matter said, asking not to be identified discussing information that hasn't yet been made public.

The transaction is part of Nasdaq's strategy to shift resources into offerings with more predictable revenue streams. It also gives private equity firm Thoma Bravo a seat on Nasdaq's board and a 14.9% stake, making it one of the company's largest shareholders. 

Adenza was born out of two businesses that Thoma Bravo merged in 2021 — Calypso Technology and AxiomSL. The combined firm sells software to banks, asset managers, exchanges and other parts of the financial-services industry that help manage regulatory reporting, compliance and risk management. 

Read More: Nasdaq Seeks Predictability in Deal to Buy Thoma Bravo's Adenza

While Nasdaq is the second-largest stock exchange in the US, it bills itself as a technology company. Beyond running the exchange, the New York-based firm offers data, analytics, software and other surveillance services to clients including investors and publicly traded and closely held companies.

Under Friedman's leadership, Nasdaq has shifted its business model to become less dependent on revenue from data and transactions that tend to rise and fall with the markets. The goal of the acquisition is to boost Nasdaq's growth by tapping new clients and expanding relationships with existing customers in finance and markets. 

“Prior to this deal, we did not have a full offering of products,” Cohen said in an interview. “When we combine, we can deepen relationships with existing customers, selling them more.”

Executives said on Nasdaq's third-quarter analyst call that they completed the antitrust review process for the deal and expected it would close before the end of the year. Nasdaq issued $5.9 billion of debt for the acquisition, which they said will bring the firm's leverage to 4.7 times.

“The No. 1 rule in making this successful is making sure we are aligned,” Cohen said. “We have to make sure we cultivate this the right way so five years from now we look back on this moment and realize how far it took us.”

(Updates with executives' comments starting in the third paragraph.)

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