Broadridge announces $2.5b deal to acquire Itiviti

Rick Steves

Itiviti offers comprehensive tools to support both connectivity and adaptivity to changing market dynamics and regulatory demands, with a focus on front-office trade order and execution management systems, FIX connectivity, and network offerings.

fintech

Broadridge is taking a significant step to expand its Capital Markets franchise as the company has reached a deal with Nordic Capital to acquire Itiviti in a transaction valued at €2.143 billion (approximately $2.5 billion).

The deal is expected to close in Q4 2021 and will be financed through a new $2.55 billion term credit agreement as Broadridge expects to maintain an investment-grade credit rating following the closing and plans to reduce its leverage over the next two years.

Broadridge expects the acquisition to generate attractive financial returns for its shareholders, contributing 2.5-3 points to Broadridge’s recurring revenue compound annual growth rate (“CAGR”) and 2 points to its Adjusted EPS CAGR over the fiscal year 2020-2023 time period.

The firm says it is well-positioned to achieve the higher end of the three-year 7-9% recurring revenue growth and 8-12% Adjusted EPS growth CAGRs announced in 2020.

Tim Gokey, Chief Executive Officer at Broadridge, said: “The acquisition of Itiviti enhances Broadridge’s position as a global Fintech leader. By extending our capabilities into the front office and deepening our multi-asset class solutions, Itiviti significantly strengthens our Capital Markets franchise and better enables Broadridge to help financial institutions adapt to a rapidly evolving marketplace.

“Itiviti’s well-developed footprint in APAC and EMEA will increase our scale outside North America and strengthen our ability to serve our global clients.”

Rob Mackay, CEO at Itiviti, commented: “Joining Broadridge represents an exciting next chapter for our business and team by creating a leading front-to-back capital markets technology and operations provider. The combination of our technology, solutions and people will unlock significant value for our clients and drive long-term growth for our combined business.”

Itiviti has offices in 16 countries and serves 24 of the top 25 global investment banks and over 2,000 leading brokers, trading firms, and asset managers across 50 countries.

The fintech firm offers comprehensive tools to support both connectivity and adaptivity to changing market dynamics and regulatory demands, with a focus on front-office trade order and execution management systems, FIX connectivity, and network offerings.

Itiviti’s strong presence in APAC and EMEA will significantly expand Broadridge’s revenues outside of North America and enhance Broadridge’s international footprint in key markets.

Broadridge’s Capital Markets franchise has made over $900 million in combined calendar 2020 revenues. Itiviti generated recurring revenues of approximately €210 million in calendar year 2020.

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