Nasdaq said that the acquisition is in line with its existing capital deployment priorities including organic business investment, shareholder capital return, and leverage objectives.
The Cinnober solutions are largely based on the TRADExpress platform. The portfolio of offerings includes price discovery and matching, real-time risk management, index calculation, clearing and settlement, market surveillance and data distribution.
The transaction will be funded either with cash in hand or liquidity available under the existing credit facilities.
Nasdaq president and CEO Adena Friedman said: “The combined intellectual capital, technology competence and capabilities of Cinnober and our Market Technology business will expand the breadth and depth of our fastest growing division at Nasdaq.
“Not only have the global capital markets continued to evolve rapidly, new marketplaces in various industries are demanding market technology infrastructure that enables rapid growth and scale as well as access to tools to promote market integrity.
“This acquisition will enhance our ability to serve market infrastructure operators worldwide, and will accelerate our ability to expand into new growth segments.”
Nasdaq expects to complete the transaction through a public cash offer. It has offered to acquire Cinnober at SEK75 ($8.31) per share and SEK85 ($9.42) per warrant.
Cinnober’s board of directors has also unanimously recommended that shareholders and warrant holders accept the offer. The acceptance period for the public tender offer is expected to close in the fourth quarter of this year, subject to customary conditions.
Upon completion of the transaction, Nasdaq will own more than 90% of the shares in the Swedish company.
The stock exchange is committed to existing capital deployment priorities including funding investment opportunities, continuing with its dividend growth and share repurchase objectives.
Cinnober co-founder and chairman of board of directors Nils-Robert Persson said: “Since co-founding Cinnober in 1998, Cinnober has been on an exciting journey and has become a leading supplier of financial technology providing services to exchanges and trading houses worldwide.
“I see the offer as the next step in Cinnober’s development as it will enable Cinnober and its highly talented employees to be even more successful in serving customers as well as expanding its technology and offering to even more customers and segments.
“I really believe in the strategic logic of combining Cinnober and Nasdaq’s Market Technology business also as it reinforces the strong technology foundation in Sweden. As the largest shareholder of Cinnober, I am supportive of the offer and intend to accept the offer.”
