Nasdaq, Inc. (Nasdaq: NDAQ) announced these days that it has entered into a definitive arrangement to sell its U.S. fastened income enterprise, Nasdaq Fixed Profits (NFI), to an affiliate of Tradeweb Markets Inc. (Nasdaq: TW), a top world operator of electronic marketplaces for rates, credit history, equities and cash markets.
NFI has properly repositioned alone in the U.S. Treasuries industry, creating and launching new technological innovation and product choices, which will advantage Tradeweb’s means to fulfill its clients’ wants heading ahead. The decision to promote NFI aligns with Nasdaq’s corporate strategy to concentrate its means and capital to optimize its likely as a important technology and analytics company to the world-wide money markets.
As previously disclosed in Nasdaq’s present-day and periodic reviews, Nasdaq has a contingent obligation to situation 992,247 shares of Nasdaq widespread stock to BGC Companions, L.P. or its assignees each yr by 2027 as set forth in the authentic invest in agreement associated with Nasdaq’s 2013 acquisition of the business enterprise. On the closing of the sale of NFI, the aggregate variety of Nasdaq shares that stay topic to this contingent obligation is anticipated to be minimized (pursuant to the discounting adjustment provisions set forth in the original acquire arrangement for Nasdaq’s acquisition of the small business) and accelerated, which would final result in an issuance to BGC or its assignees of an combination of somewhere around 6.2 million shares of Nasdaq in 2021.
Nasdaq intends to use the proceeds from the sale of NFI, out there tax gains and NFI functioning and clearing money, as well as other resources of funds to repurchase shares in get to offset dilution to non-GAAP earnings for every share, or EPS. The proceeds from the sale, the remaining tax gains relevant to the 2013 obtain, and the operating and clearing money to be released on closing of the transaction are believed to complete somewhere around $700 million.
To facilitate these repurchases, the Nasdaq’s Board of Administrators has authorized an enhance to the share repurchase plan of an supplemental $1 billion, topic to the closing of the NFI sale and acceleration of the share issuance to BGC or its assignees. Nasdaq does not anticipate to enhance its leverage as a result of the share repurchases linked to this transaction and intends to continue with its earlier introduced de-leveraging options adhering to the closing of the Verafin acquisition.
Right after giving effect to these repurchases, Nasdaq expects this transaction to be 2% dilutive to non-GAAP EPS in the twelve-month period immediately after its closing and does not assume product dilution in subsequent periods.
Nasdaq Set Revenue contributed close to $23 million in revenue during the twelve-month period ending December 31, 2020.
The transaction is anticipated to close later in 2021 subject matter to the fulfillment of customary closing problems, which include the receipt of required regulatory approvals.
Morgan Stanley & Co. LLC is acting as special financial advisor and Skadden, Arps, Slate, Meagher & Flom LLP is performing as counsel to Nasdaq.