Nasdaq Pays $10.5 Billion for Risk Management Firm Adenza

Nasdaq

Nasdaq is acquiring risk management and compliance software maker Adenza for $10.5 billion.

The deal, announced Monday (June 12), is apparently Nasdaq’s largest ever, and will see the exchange operator pay Adenza’s owner — investment firm Thoma Bravo — $5.75 billion in cash and 85.6 million shares of Nasdaq common stock.

Nasdaq said in a news release that the purchase will enhance its offerings in the regulatory technology, compliance and risk management spaces.

“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 CEO Adena Friedman said in the release.

“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.”

Aside from Adenza’s risk and regulatory management solutions, Nasdaq says the company also brings new relationships in the European banking system to Nasdaq’s existing presence in North America and the Asia Pacific region, “positioning the business to meet worldwide demand for outsourced risk management and regulatory solutions.”

Based in New York and London, Adenza has more than 60,000 users that include some of the world’s largest financial institutions, including global and regional banks, asset managers, pension funds, hedge funds and central banks.

The deal comes at a time when compliance has become increasingly important to FinTechs, as Kiran Hebbar, chief financial officer at identity decisioning platform Alloy, told PYMNTS in an interview last week.

Because FinTechs typically are unused to functioning in strict regulatory environments, regulators are beginning to embrace a more proactive posture to ensure successful anti-fraud measures. This may require FinTechs to focus more on compliance and fraud prevention.

“What’s needed in this modern world is a holistic approach to solving fraud,” Hebbar said.

He added that technology will be key to this new strategy, and this is why firms like his are working with banks and their FinTech partners to bolster compliance and security capabilities.

“There will be a new operating environment for many companies [in 2023 and beyond],” Hebbar said. “There will be a focus on improving efficiency and profitability … and prioritizing fraud and compliance. Compliance needs to be built into the fabric of every company.”