Stock market index Nasdaq ^IXIC announced Thursday that it is purchasing anti-financial crime solutions provider Verafin for $2.75 billion in cash.
The agreement will combine Verafin's suite of anti-financial crime management tools with Nasdaq's reach to combat "a worldwide problem that demands innovative action," the companies said.
Founded in 2003, Verafin works with over 2,000 financial institutions in North America with a cloud platform to detect, investigate and report money laundering and financial fraud activities.
Verafin will become part of Nasdaq's existing crime solutions portfolio, which includes Nasdaq Trade and Market Surveillance as well as the Nasdaq Automated Investigator and its Buy-Side Compliance product.
"At the core of Nasdaq’s mission, we champion fairness and integrity in the markets that we build and in the broader financial ecosystem in which we operate, and combatting financial crime is central to achieving our goals," said CEO Adena Friedman.
The deal is expected to close in the first quarter of 2021 with revenue from the acquisition expected to increase the revenue contribution from Nasdaq's financial security business segment to 47% from 44% pro forma for the third quarter of 2020.
The purchase is expected to deliver EPS accretion beginning in 2022.
"Verafin’s innovative fraud and AML detection platform, combined with Nasdaq’s leading trade and market surveillance solution, will empower Nasdaq to play an increasingly important role in building stronger economies around the world,” Friedman said.
Evercore served as lead financial adviser for the transaction along with JPMorgan Securities.