Nasdaq to acquire anti-financial crime group Verafin for $2.75 billion

Marco Green
November 20, 2020

Nasdaq Inc. announced Thursday a deal to buy privately held anti-financial crime management company Verafin for $2.75 billion in cash. Based in Canada, Verafin provides more than 2,000 financial institutions a cloud-based platform to detect, investigate and financial fraud and report money laundering.

Nasdaq will aim to provide Verafin's technology to the 250 banks, exchanges, broker-dealers and buy-side organizations, and regulatory authorities, that use its trade surveillance systems, the company said.

Nasdaq will finance the transaction, which will add to its earnings per share beginning in 2022, with a combination of US$2.5 billion of debt and cash on hand.

"This investment by Nasdaq, a global leader in financial technology, is a major vote of confidence and a significant win for the province of Newfoundland and Labrador's technology and innovation sector", Jamie King, Verafin's CEO, said in a release.

The Verafin transaction is not Nasdaq's first acquisition in Canada.

Financial crime is a significant - and growing - global issue that demands courageous action.

The deal will mean Nasdaq's investment in Verafin will bring their product to larger-tiered banks and financial clients on an worldwide scale.

"Financial crime, including money laundering, is among the biggest and most hard challenges that banks face around the world", Nasdaq Chief Executive Officer Adena Friedman said in a presentation. As part of the acquisition, it committed to keeping Verafin's executive leadership in place and keep the company's headquarters in St. John's, Newfoundland, and Labrador. "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".

In order to foster the next generation of talent in the province and help support Verafin's growing employment base, Nasdaq will work closely with Memorial University to grow its scholarship program at the University, enhance its co-op programs, and fund and supervise at least six Mitacs fellowships annually for Masters and PhD students.

She says they haven't brought their business anywhere outside North America yet.

The sale is still subject to regulatory approvals and other customary closing conditions, and is expected to close in early 2021. Verafin is expected to produce more than $140 million in revenue next year.

Other reports by Click Lancashire

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