Nick Chong · 8 hours ago · 2 min read
Nasdaq Acquires Swedish Fintech Cinnober in $190 Million Deal
The world’s second largest stock exchange, Nasdaq, has taken its strategic technology infrastructure to new heights by procuring a partnership deal with Cinnober.
Nasdaq Adds Cinnober’s Fintech Knowledge
Cinnober has spent two decades polishing its brand as a luminary multi-asset class solutions technology service. The Swedish company has firmly planted its roots, providing trading system assistance to venues and clearinghouses worldwide.
Moving forward, Nasdaq plans to fuse its approach with Cinnober’s fintech knowledge pursuant to an earned reputation for securing capital deployment priorities, including shareholder capital return and leveraging objectives. As a result of foregoing traditional accounting principles, a “synergistic” disposition is foreshadowed to demonstrate a 10 percent ROIC within 3-5 years.
Profitability will likely be apparent within 12 months, given the enterprise mitosis is successful.
Nasdaq’s CEO Adena Friedman brought attention to the rapidly evolving global markets, which are creating new industries and therefore demand for transaction technology. Friedman said:
“[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.”
Nils-Robert Persson, co-founder and chairman of the board of directors at Cinnober, reiterated the long-term benefits of the acquisition, saying company development provides access to larger markets and additional segmented audiences.
Persson said in a press release:
“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.”
Accompanying Nasdaq’s cash offer this morning, it also offered to take responsibility of all outstanding shares and warrants at 75 Swedish krona (SEK) per share and 85 SEK per warrant. The offer is valued at USD $190 million.
Shareholders and warrant holders were advised by the entire Cinnober board of directors to accept the offer.
It is believed Nasdaq will fund the transaction with either cash on hand or available liquid assets from existing credit facilities. The internally owned subsidiary remains focused on base mission initiatives with capital deployment priorities such as funding organic investments. Dividend growth and share repurchase objectives are a priority alongside the goal to achieve a “mid-2Xs” gross debt to EBITDA ratio by mid-2019.