US stock exchange group Nasdaq has agreed to acquire Verafin, a Canada-based provider of anti-financial crime management solutions, for $2.75bn in an all-cash deal.
Established in 2003, Verafin offers a cloud-based platform to more than 2,000 financial institutions across North America for detection, investigation, and reporting of money laundering and financial fraud.
The company’s products are said to be supported by intelligent analytics.
Its anti-financial crime management products utilise machine learning, shared data insights, and also visualisation and investigation tools. These are said to help in improving detection accuracy and lowering costs for financial institutions.
Nasdaq expects the combination of Verafin’s suite of anti-money laundering (AML) and fraud platform with its own reach and regulatory technology solutions to create a major global SaaS company in handling financial crime.
The stock exchange group said that its relationships with the majority of top Tier 1 and Tier 2 banks across the world will fast track Verafin’s strategy of replacing legacy providers and manual processes with its cloud-based solutions.
Nasdaq president and CEO Adena Friedman said: “At the core of Nasdaq’s mission, we champion fairness and integrity in the markets that we build and in the broader financial ecosystem in which we operate, and combatting financial crime is central to achieving our goals.
“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.”
Headquarters of Verafin to remain in St. John’s
Post-acquisition, Nasdaq will retain Verafin’s headquarters in St. John’s in Newfoundland and Labrador. Verafin’s executive leadership team will be retained in the same roles to continue to steer its growth.
The Canadian firm’s results will be reported within the market technology segment of Nasdaq, after completion of the deal.
Verafin CEO Jamie King said: “Since we began discussions with Nasdaq, we felt their DNA strongly mirrored our own core values: innovation, teamwork, entrepreneurship, and a commitment to continued growth and development.
“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.”
Spectrum Equity and Information Venture Partners, who are significant investors in Verafin, have agreed to divest their stake as part of the deal.
Subject to regulatory approvals and meeting of other customary closing conditions, the deal is anticipated to close in Q1 2021.
