Nasdaq to buy software firm Adenza in $10.5bn deal

Nasdaq said on Monday that it has agreed to buy software firm Adenza from Thoma Bravo in a $10.5bn cash and stock deal.

Nasdaq said Adenza brings "an attractive financial profile", with around $590m of estimated 2023 revenue, organic revenue growth of around 15%, annual recurring revenue growth of 18%, and an adjusted EBITDA margin of 58%.

It said the business 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 expected to enhance Nasdaq’s financial profile by growing Solutions Businesses revenue from 71% of total revenue today to 77% in 2023, increasing adjusted EBITDA margin to 57%, and adding around $300m of annual unlevered pre-tax cash flow.

Tal Cohen, president of Market Platforms, Nasdaq, said: "The addition of Adenza accelerates our ambition to modernise and advance the world’s economies.

"It also introduces a fast-growing $10bn 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 year. 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."