Nasdaq to buy financial fraud detection firm Verafin for US$2.75b

Nasdaq buying Verafin for $2.75 billion, keeping headquarters in St. John's

Exchange operator Nasdaq Inc said on Thursday it would buy anti-financial crime software firm Verafin for US$2.75 billion (RM11.27 billion) in cash, significantly expanding its reach in the regulatory technology market. Verafin provides over 2,000 financial institutions in North America a cloud platform to detect, report and investigate money laundering and financial fraud.

The deal will see Verafin's technology made available to Nasdaq's global network of almost 250 banks, exchanges, investing companies and regulatory authorities that rely on Nasdaq's technology to detect market manipulation and abuse, the release 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".

Friedman also said the deal means the buyer is "committed to supporting innovation and growth in St. John's and Newfoundland and Labrador". This bold step of acquiring Verafin empowers Nasdaq to play an increasingly important role in building stronger economies around the world.

The acquisition strengthens Nasdaq's existing regulatory technology and anti-financial crime solutions, which include its renowned Nasdaq Trade and Market Surveillance offering, its Buy-side Compliance product, as well as the Nasdaq Automated Investigator for anti-money laundering (AML).


Verafin's headquarters will remain in St. John's, and its executive leadership team will continue to run the company, according to the statement. "Combatting financial crime is central to achieving our goals".

Verafin was founded in 2003 and was initially part of Memorial University's Genesis Centre, an innovation hub for new businesses. Nasdaq will also fund and supervise at least six Mitacs fellowships annually for master's and PhD students at MUN.

"The connections that they're going to be able to bring our business, the banks, the financial institutions, the markets that they work in globally, is tremendously exciting for us on that path to growth".

The sale is still subject to regulatory approvals and other customary closing conditions, and is expected to close in early 2021.

Verafin has grown at a compound annual revenue growth rate of approximately 30% over the last three years.

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