NASDAQ bids $190 million for crypto-friendly start-up
Nasdaq, the world’s second largest stock exchange in terms of market capitalization, has set the crypto-world alight yet again. This time, the exchange is seeking to acquire Cinnober, a Stockholm-based firm that offers real-time clearing technology for trading venues and clearinghouses across the world.
Nasdaq has made an all-cash public offer of $190 million to the shareholders and warrant holders of Cinnober. As per the deal, the exchange (through its subsidiary) has offered to acquire all outstanding shares and warrants of Cinnober at SEK 75 per share and SEK 85 per warrant.
The acquisition, which will be funded with either cash or liquidity available under its credit facilities, is expected to be accretive to the exchange's adjusted earnings within 12 months of the deal's closing. The deal will also help the stock exchange meet its target of 10% return on invested capital in 3-5 years.
Nasdaq highlighted Cinnober's "largely-recurring" revenue base and said the acquisition will generate synergies rising from product enhancement, cross-sale and efficiency opportunities.
Adena Friedman, president and CEO of Nasdaq, said, “the combined intellectual capital, technology competence and capabilities of Cinnober and our Market Technology business will expand the breadth and depth of our fastest growing division at Nasdaq.”
“Not only have the global capital markets continued to evolve rapidly, 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,” she added.
Nils-Robert Persson, chairman and co-founder of Cinnober, said, “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."
Cinnober’s directors are quite pleased with the offer, and have unanimously recommended that the company's shareholders accept the public offer being made.
The directors have also allowed Nasdaq to carry out the required due diligence on the company's financial structure. The acceptance period for the offer will likely begin on or around October 29 and will end on or around December 14.
The acquisition comes after the stock exchange reportedly held private meetings to discuss the current state and future development of the cryptocurrency industry with several executives from top digital asset trading platforms in the United States.
Nasdaq is also reportedly working on a price predictor of cryptocurrencies such as Bitcoin and Ethereum. It plans on expanding its Analytics-Hub and developing technology that will allow users to predict the price fluctuations of certain digital assets in the crypto-market.
Image via Shutterstock
Join our Telegram group