8-KMaterial AgreementsRegulation FDOther Events+1

NASDAQ, INC. 8-K Report, Material Agreement (Nov 19, 2020)

Filed November 19, 2020For Securities:NDAQ

Summary

Nasdaq, Inc. (NDAQ) has announced a significant acquisition through a definitive agreement to purchase Verafin Holdings Inc. for an aggregate purchase price of $2.75 billion. This strategic move aims to bolster Nasdaq's presence and capabilities in fraud detection and anti-financial crime solutions, a growing area within the financial technology sector. The acquisition is subject to customary closing conditions, including regulatory approvals under the Investment Canada Act and Hart-Scott-Rodino Antitrust Improvements Act. To finance this substantial transaction, Nasdaq has secured a commitment letter for up to $2.5 billion in senior bridge term loans. The company has also outlined plans for retaining key Verafin employees through escrow arrangements and a management incentive plan designed to align their interests with the post-acquisition performance of Verafin.

Key Highlights

  • 1Nasdaq to acquire Verafin Holdings Inc. for $2.75 billion.
  • 2The acquisition strengthens Nasdaq's position in fraud detection and anti-financial crime solutions.
  • 3Financing for the acquisition includes up to $2.5 billion in senior bridge term loans.
  • 4Closing is contingent on regulatory approvals, including Investment Canada Act and Hart-Scott-Rodino.
  • 5Key Verafin employees will participate in an escrow arrangement and a management incentive plan to ensure retention and alignment.
  • 6Sellers of Verafin are subject to non-compete and non-solicitation clauses post-acquisition.

Frequently Asked Questions

The acquisition of Verafin is intended to significantly enhance Nasdaq's offerings and market position in the rapidly growing areas of fraud detection and anti-financial crime solutions, leveraging Verafin's established technology and customer base.

Nasdaq has secured a commitment for up to $2.5 billion in senior bridge term loans from a group of financial institutions to help fund the acquisition. The remaining portion of the purchase price is expected to be funded through existing cash reserves or other means.

The closing is subject to several conditions, including obtaining approval under the Investment Canada Act, the expiration or termination of the waiting period under the Hart-Scott-Rodino Antitrust Improvements Act, and the satisfaction of customary representations, warranties, and covenants by both parties.

Nasdaq has implemented an escrow arrangement where a portion of the after-tax consideration for certain Verafin employees will be held and released over three years, conditional on continued employment. Additionally, a cash management incentive plan is in place to provide these employees an opportunity to benefit from Verafin's future valuation increase, also tied to continued employment.