Nasdaq to give 85.6 million newly issued shares to Adenza owners when the deal closes
Shares of Nasdaq Inc. took a dive Monday after the securities trading, clearing and listing company’s $10.5 billion deal to buy software company Adenza from private-equity firm Thoma Bravo included about $5 billion worth of stock.
“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,” said Tal Cohen, president of market platforms at Nasdaq.
Nasdaq’s stock NDAQ, -11.81% tumbled 11.3% in afternoon trading, enough to pace the S&P 500 index’s SPX, +0.93% decliners. It was headed for the biggest one-day decline since it tumbled 12.8% on April 2, 2013.
Under the terms of the deal, which would be the largest in Nasdaq’s history, Nasdaq will pay $5.75 billion in cash, and provide 85.61 million shares of newly issued common stock to Adenza owners at the time of closing, which is expected to occur within six to nine months.
The new shares issued represented 17.4% of the 490.77 million Nasdaq shares outstanding as of April 26. At current stock prices, the shares issued would be valued at $4.39 billion.
Nasdaq said it has obtained “fully committed” bridge financing for the cash portion of the deal. The company said it plans to issue $5.9 billion of debt between the deal’s signing and closing, and said it will use the proceeds to replace the bridge commitment.
“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,” said Nasdaq Chief Executive Adena Friedman.
Adenza is expected to have $590 million in revenue in 2023, with annual recurring revenue growth of 18%.
Nasdaq’s stock has lost 16.4% year to date, while the S&P 500 SPX, +0.93% has gained 13.0%.