Deal closes with firms planning a joint presence at next week’s NIRI conference
NASADQ OMX has completed the acquisition of Thomson Reuters’ IR, PR and multimedia businesses for a reported $390 mn, clinching its ninth ‒ and largest ‒ acquisition of software and information services targeted at corporate clients. The deal, announced last December, brings 7,000 Thomson clients worldwide and more than 1,000 employees under the NASDAQ OMX umbrella.
In an aggressive push, begun in 2006 with the acquisition of Shareholder.com, NASDAQ has acquired companies providing a variety of IR, PR and governance offerings to corporate clients. The Thomson acquisition will be integrated with these other businesses into a newly formed business unit, Global Technology Solutions.
This new unit, which also includes trading technology sold to exchanges worldwide, will account for approximately 29 percent of the exchange’s total revenue, becoming the largest NASDAQ business unit, according to Demetrios Skalkotos, senior vice president of corporate solutions for NASDAQ OMX. The company says it expects the acquisition to be accretive to earnings ‘within the first 12 months, excluding transaction-related costs, and to generate attractive returns on capital.’
Skalkotos says the acquisition is not merely complementary to NASDAQ’s trading and markets business, but also creates a major financial services software business. ‘This [announcement] is not about an exchange that happens to have a software business, but about a software business that happens to be in an exchange,’ he explains.
The new unit will serve more than 10,000 corporate clients in more than 60 countries, he adds, noting that a ‘very aggressive software development schedule’ is already under way to integrate and enhance the various software offerings over the next few years.
Corporate clients that are not NASDAQ-listed companies will pay the same fees for services as NASDAQ-listed companies, says Skalkotos. The exchange offers a fee structure to induce companies to launch an IPO or switch their listing from the NYSE.
These latest developments have broadened NASDAQ’s revenue base at a time when stock markets around the world have been competing for listings and trading volumes. Nowhere is the competition fiercer than between NASDAQ and the NYSE, which faced off two years ago, when the NYSE and the Deutsche Börse attempted to merge and NASDAQ came in with a competing offer that some saw as an attempt the squelch the proposed deal. Both bids were ultimately turned down by regulatory authorities on anti-trust grounds.
NYSE Euronext is near to closing on a merger with IntercontinentalExchange, which had previously been part of the failed NASDAQ bid.
The deal between NASDAQ and Thomson Reuters closes a week before the major gathering of corporate IR practitioners at NIRI’s annual conference. The two companies, which in the past have each had a major presence at the conference, will share a combined booth at the show. Skalkotos says there has been ‘a lot of duplicate planning’ as well as joint preparations leading up to the show.
