Nasdaq, Inc. (Nasdaq: NDAQ), a technology company serving the global financial system, today announced it has entered into a definitive agreement to acquire Adenza, a provider of mission-critical risk management and regulatory software to the financial services industry, from Thoma Bravo, a leading software investment firm, for $10.5 billion in cash and shares of common stock. The acquisition accelerates Nasdaq’s strategic vision to become the trusted fabric of the world’s financial system. Upon the closing of the transaction, Holden Spaht, a Managing Partner at Thoma Bravo, is expected to be appointed to Nasdaq’s Board of Directors, which will be expanded to twelve members.
Adenza is a fast-growing software company created through the combination of two highly respected and well-recognized 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.
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 significantly enhances Nasdaq’s offerings across an even 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 unmatched regulatory technology solutions.
Adenza brings an attractive financial profile, with approximately $590 million of 2023E revenue, organic revenue growth1 of approximately 15%, annual recurring revenue growth of 18%, and an adjusted EBITDA margin1 of 58%. The company has a loyal and growing client base, with 98% gross retention, 115% net retention, and a durable mix of approximately 80% recurring revenue. The addition of Adenza is projected to enhance Nasdaq’s already strong financial profile by growing Solutions Businesses revenue2 from 71% of total revenue today to 77% in 2023E, increasing adjusted EBITDA margin to 57%3, and adding approximately $300 million of annual unlevered pre-tax cash flow1.
“This is an exceptional opportunity to acquire a leading software company that enhances Nasdaq’s position at the heart of the global financial system,” said Adena Friedman, Chair and Chief Executive Officer, Nasdaq. “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. Nasdaq aspires to be that partner every day, and with Adenza we can offer an even broader range of mission-critical solutions that enhance the liquidity, transparency, and integrity of the world’s financial system.”
“The addition of Adenza accelerates our ambition to modernize and advance the world’s economies,” said Tal Cohen, President of Market Platforms, Nasdaq. “It also introduces a fast-growing $10 billion serviceable addressable market to Nasdaq. Since the implementation of Dodd-Frank in 2010, banks have increased their compliance costs by more than $50 billion per year4. 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. With complementary capabilities and geographic footprints, we can see a clear path to deepening our client relationships globally with leading end-to-end platforms across risk, trading, and regulatory reporting.”
“When we combined AxiomSL and Calypso almost two years ago under Didier Bouillard’s leadership, we had a vision to create a truly unique software franchise that could help financial institutions across the globe manage their most complex trading, risk, and regulatory reporting requirements,” said Holden Spaht, a Managing Partner at Thoma Bravo. “This acquisition is a clear validation of that strategy, and as part of Nasdaq, Adenza will be in a stronger position to build on its impressive momentum and serve an even larger global client base. Nasdaq has a long and impressive history of developing innovative solutions that have revolutionized the global capital markets, making them the perfect partner for this next phase of Adenza’s journey. We are excited to become a strategic shareholder in Nasdaq and bring our deep software and technology experience to help drive further innovation and digital transformation across the global financial system.”
“This transaction is an endorsement of the entire Adenza team and what we have built with Thoma Bravo, from our market-leading products to the immense value we have delivered for our customers,” said Didier Bouillard, Chief Executive Officer at Adenza. “Together with Nasdaq, we will be in an even stronger position to take advantage of the growing market opportunities and to provide customers with expanded solutions to solve their most complex problems.”