Nasdaq is buying Adenza, a company that makes software used on Wall Street, for $10.5 billion in cash and stock.
The acquisition from owner Thoma Bravo, an investment company, includes $5.75 billion in cash and 85.6 million shares of Nasdaq common stock.
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Nasdaq CEO Adena Friedman has been pushing the company further into tech, expanding beyond its roll as a marketplace for trading that is reliant largely on trading volumes to thrive.
“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,” Friedman said in a written statement. "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.”
Adenza was created through the combination of 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.
With 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.
Nasdsaq said Monday that the acquisition 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.
Shares of Nasdaq, based in New York City, fell more than 7% before the opening bell Monday.
Once the deal closes, Thoma Bravo managing partner Holden Spaht is expected to join the Nasdaq board, which will expand to 12 directors.
The transaction is targeted to close in six to nine months.