Nasdaq (NDAQ) is planning to acquire Swedish trading solutions provider, Cinnober. The second largest stock exchange in the world will pay $190 million in cash to overtake the Swedish company. The Cinnober acquisition will introduce a stream of attractive recurring revenue for the shareholders of Nasdaq.
Cinnober acquisition to eliminate one rival for Nasdaq
The exchange has a huge presence in the Nordic market. With this acquisition, Nasdaq will successfully eliminate one rival from the trading market. Founded in 1998, Cinnober faced a loss of $10.69 million in 2017. To overcome the losses, Cinnober hired the former managing director of Royal Bank of Canada, Peter Lenardos in August this year as chief executive in place of Veronica Augustsson.
Cinnober serves as a multi-asset exchange and provides clearing solutions for the entire chain of transaction. It includes market data services and price discovery. Prior to joining Nasdaq, Cinnober first teamed up with BitGo, a leader in the institutional grade virtual currency security market. BitGo and Cinnober provided solutions to virtual currency exchanges.
Nils-Robert Persson, the largest shareholder, and co-founder of Cinnober thinks that the offer is sensible for both the companies and most probably will accept Nasdaq’s offer.
Acquisition to expand Nasdaq’s market
The CEO and president of Nasdaq, Adena Friedman believes that after this deal the market technology business of his company will expand and will become the fastest growing division. According to Adena, “Not only have the global capital markets continued to evolve rapidly, but 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.”
As per latest reports, the two companies will close the deal during the fourth quarter of 2018 advised by Lazard, the renowned investment bank. Nasdaq recently held a closed-door meeting with experts from cryptocurrency industry immediately after the release of acquisition news. During the meeting, the participants discussed ways to legitimize virtual assets in the form of traditional securities product. Nasdaq is also planning to introduce crypto data to its market research tool, Analytics Hub.