Nasdaq Inc (Nasdaq: NDAQ) opened about 10% down this morning after it confirmed plans of buying Adenza Group Inc for $10.5 billion.

Details of the Nasdaq-Adenza deal

On Monday, the financial services company said it will pay $5.75 billion in cash to acquire Adenza.

The remaining will be paid in stock to shareholders of the software company. According to Tal Cohen – the President of Nasdaq said:

With Adenza, we’ll 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.

The market platforms company expects the agreement to close within six to nine months from now. Versus its year-to-date high, Nasdaq stock is down close to 20% at writing.

Adenza to generate $590 million in 2023

Nasdaq also confirmed today that it has already secured bridge financing (fully committed) for the deal.

It will issue debt worth about $5.9 billion between now and when the transaction is completed, proceeds from which will replace the bridge commitment. In the press release, CEO Adena Friedman said:

The acquisition brings together two world-class franchises in market infrastructure, regulatory and risk management expertise at a time when financial institutions are navigating complex market dynamics.

Estimates are for Adenza to generate $590 million in revenue this year. It’s expected to grow recurring revenue at an annual pace of 18%. Wall Street currently has a consensus “overweight” rating on Nasdaq stock.

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