American stock exchange operator Nasdaq has inked a definitive agreement to acquire Verafin for $2.75bn in cash.
Founded in 2003, Verafin offers anti-financial crime management solutions to over 2,000 financial institutions in North America.
It provides a cloud-based platform for detecting, investigating, and reporting money laundering and financial fraud.
The latest acquisition will combine Verafin’s anti-financial crime management solutions with Nasdaq’s regtech to create a software-as-a-service (SaaS) platform to combat financial fraud.
Verafin is said to bolster Nasdaq’s existing regtech and anti-financial crime solutions.
This includes Nasdaq Trade, Market Surveillance, Buy-side Compliance, and Nasdaq Automated Investigator for anti-money laundering (AML).
Nearly 250 banks, exchanges, broker-dealers, buy-side organisations, and regulatory authorities can now leverage Verafin’s capabilities to detect market manipulation.
Nasdaq will fund the acquisition with a combination of $2.5bn of debt and cash on hand.
As part of this transaction, Verafin backers Spectrum Equity and Information Venture Partners have agreed to sell their stake.
Under the agreement, Verafin headquarters will remain in Canada.
Nasdaq will invest in increasing employment at Verafin as well as in maintaining its existing workforce.
It will also increase investments in Verafin’s research and development (R&D), including a new $1m R&D partnership project with The Genesis Centre.
The acquisition will boost Nasdaq’s revenues, performance and earnings per share (EPS).
Nasdaq president and CEO Adena Friedman said: “Verafin’s innovative fraud and AML detection platform, combined with Nasdaq’s leading trade and market surveillance solution, will empower Nasdaq to play an increasingly important role in building stronger economies around the world.”
Verafin CEO Jamie King said: “Together with NASDAQ, we will be a clear leader in expanding the fight against illicit finance by delivering our capabilities to a global client base from our headquarters in St. John’s.”
The transaction is expected to close in the first quarter of 2021, subject to the receipt of regulatory approvals.
Earlier this year, Nasdaq announced the purchase of Solovis, a fintech firm serving institutional investors.