Nasdaq Acquires RegTech Firm Verafin for $2.75 billion

Nasdaq has completed the acquisition of Verafin, a Canadian-based RegTech firm renowned for its regulatory and anti-financial crime solutions. The staff and executive team will remain in the stand-alone organization aligned with Nasdaq’s Market Technology business.

Verafin will be now part of Nasdaq in exchange for $2.75 billion, but the outlook is for organic growth in non-GAAP operating expenses over the medium-term to 3-6% up from the 2-4% amount previously announced. This reflects high expectations for the combined anti-financial crime technology offering.

The inclusion of the leading Regtech business is meant to establish Nasdaq’s role as a SaaS technology provider with stronger regulatory and anti-financial crime solutions. Nasdaq’s global ecosystem of Tier-1 and Tier-2 banks and broker-dealers will be the first to enjoy the new offering.

Adena Friedman, President and Chief Executive Officer at Nasdaq, said: “At Nasdaq, we believe that fair, secure, and transparent markets are vital to creating strong economies that move the world forward. Nasdaq’s global reach combined with Verafin’s powerful analytics, robust data insights, and innovative investigation tools, will create a next-generation suite of solutions to fight financial crime and promote integrity throughout the financial ecosystem. We are thrilled to welcome Verafin’s talented employees into the Nasdaq family and look forward to supporting local institutions in Newfoundland and Labrador to promote continued innovation.”

The inclusion of Verafin increases the growth potential of Nasdaq: revenue growth in the Market Technology business of 13-16% CAGR and in the broader Solutions Segments of 6-9% organic revenue CAGR, both over the medium-term (3-5 years).

In 2020, Nasdaq announced the acquisition of Texas-based Fintech service provider Solovis. Known for its multi-asset class portfolio management, analytics and reporting tools, Solovis joined Nasdaq as part of the stock exchange operator’s strategic investment plan to seize opportunities in the capital markets sector while meeting return on investment capital objectives.

Solovis’s solutions are available via NASDAQ’s eVestment group. As with Verafin, both the co-founders of Solovis and the rest of Solovis’s team remained in-place and continue to serve from the firm’s offices.