US-based financial technology system Nasdaq has set out to acquire risk management and regulatory software Adenza from Thoma Bravo for USD 10.5 billion. Adenza is a software company created through the combination of two global brands – Calypso and AxiomSL.

Calypso serves capital markets participants with end-to-end treasury, risk, and collateral management workflows, and AxiomSL supports financial institutions with leading regulatory and compliance software. Better adhering to regulatory and compliance frameworks The addition of Adenza to Nasdaq’s trusted brand and platform of mission-critical solutions complements Nasdaq’s Marketplace Technology and Anti-Financial Crime solutions and augments Nasdaq’s offerings across a broader spectrum of regulatory technology, compliance, and risk management solutions. With Adenza, Nasdaq will also be able to provide comprehensive support to financial institutions, establishing a multi-asset class, full trade lifecycle platform with enhanced regulatory technology solutions.

Executives from Nasdaq said 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 modernise infrastructure, their clients are seeking trusted partners equipped to support them in this challenging environment.

The strategic rationale and long-term value creation The acquisition of Adenza is an exciting opportunity to align two cultures with complementary technologies and client reach to create a world-class technology solutions provider for the financial industry. Both Nasdaq and Adenza drive success with similar client-centric, results-oriented, and innovative cultures. Nasdaq’s trusted brand and artificial intelligence and cloud capabilities, combined with Adenza’s modular solutions and streamlined go-to-market operating model, significantly enhances the value proposition to clients with an even broader, more scalable suite of software and technology solutions.

The addition of Adenza also provides significant value creation potential over the medium and long term. Nasdaq expects to achieve USD 80 million in run-rate net expense synergies by the end of year two through functional alignment, product rationalisation, location optimisation, and consolidation of vendors and real estate. The transaction is also expected to unlock additional value through cross-sell opportunities, with anticipated run-rate revenue synergies of USD 50 million in the medium term and USD 100 million over the long term.

Financial details of the transaction Nasdaq is acquiring Adenza for USD 10.5 billion, comprised of USD 5.75 billion in cash and 85.6 million shares of Nasdaq common stock, based on the volume-weighted average price per share over 15 consecutive trading days prior to signing. Nasdaq has obtained fully committed bridge financing for the cash portion of the consideration and plans to issue approximately USD 5.9 billion of debt between signing and closing and use the proceeds to replace the bridge commitment. At the closing of the transaction, Nasdaq will issue the shares to the owners of Adenza, which is a company controlled by Thoma Bravo, representing approximately 14.9% of the outstanding shares of Nasdaq.

Following the transaction, Nasdaq expects leverage of approximately 4.7x and investment grade ratings of BBB/Baa2 Stable. Nasdaq is committed to reducing leverage to 4.0x in 18 months and to approximately 3.3x in 36 months. Nasdaq intends to pursue its existing capital deployment plan, including steadily increasing its dividend per share and dividend payout ratio to achieve 35-38% until 2026/2027.

The company intends to repurchase shares over time to partially offset dilution from the transaction in addition to continuing to offset employee share-based compensation. The transaction is subject to regulatory approvals and other customary closing conditions and is expected to close within six to nine months from the acquisition. .