Nasdaq agreed to buy Thoma Bravo-owned software firm Adenza for $10.5 billion, with the exchange operator's biggest-ever deal broadening its financial technology footprint but giving shareholders a case of sticker shock.
In brief:
-Adenza's risk management and regulatory software is primarily used by banks and brokerages and will help Nasdaq diversify further beyond its roots as an exchange operator, building on a spate of fintech deals in recent years
-Nasdaq's shares tumbled over 10% to a nearly one-year low following the deal's announcement as investors viewed it as an expensive bet
-The deal values Adenza at almost 18-times its expected 2023 revenue
What does this mean?
Nasdaq CEO Friedman said that because Adenza is a bit of an unknown asset, it will take time for investors to digest the details. Adenza was created in 2021 when Thoma Bravo merged Calypso Technologies with AxiomSL and is expected to generate about $590 million in revenue this year.
