Nasdaq completes $2.75b acquisition of Canadian regtech Verafin

Rick Steves

Verafin’s capabilities will be available to the global network of nearly 250 banks, exchanges, broker-dealers and buy-side organizations, and regulatory authorities that already rely on Nasdaq’s technology to detect market manipulation and abuse.

Nasdaq has announced the acquisition of Verafin, an anti-financial crime management solutions provider. This will help the global financial technology company to expand its existing RegTech solutions, which will be offered to a global ecosystem of Tier-1 and Tier-2 banks and broker-dealers.

Adena Friedman, President and Chief Executive Officer, 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.

Verafin boasts big data intelligence capabilities, visual storytelling, and collaborative investigation. “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”, Ms. Friedman added.

Verafin operates in St. John’s, Newfoundland, and Labrador and will continue to do so, as a stand-alone organization aligned with Nasdaq’s Market Technology business. Nasdaq estimates the inclusion of Verafin to increase organic revenue growth in the Market Technology business of 13-16% CAGR over the medium-term (3-5 years). The broader Solutions Segments businesses may also grow to achieve a 6-9% organic revenue CAGR over the medium-term.

The deal between Nasdaq and Verafin was first announced in November 2020 and involved a sum of $2.75 billion in order to accelerate the US exchange’s evolution into a Saas technology provider. Verafin’s capabilities will be available to the global network of nearly 250 banks, exchanges, broker-dealers and buy-side organizations, and regulatory authorities that already rely on Nasdaq’s technology to detect market manipulation and abuse.

Verafin is benefiting from strong regulatory tailwinds which are forcing financial institutions to invest significant capital and resources into combating financial crime. The company has delivered a compound annual revenue growth rate of approximately 30% over the last three years and expects to deliver in excess of $140 million in revenue in 2021.

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