Nasdaq has made an USD 190m all cash recommended public offer to the shareholders and warrant holders of Cinnober (Nasdaq First North: CINN), a major Swedish financial technology provider to brokers, exchanges and clearinghouses worldwide.
“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,” said Adena Friedman, President and CEO, 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.”
“Since co-founding Cinnober in 1998, Cinnober has been on an exciting journey and has become a leading supplier of financial technology providing services to exchanges and trading houses worldwide,” said Nils-Robert Persson, co-founder and Chairman of the Board of Directors of Cinnober. “I see the offer as the next step in Cinnober’s development as it will enable Cinnober and its highly talented employees to be even more successful in serving customers as well as expanding its technology and offering to even more customers and segments. 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.”
The acquisition of Cinnober is expected to deliver attractive shareholder returns with a combination of Cinnober’s largely-recurring revenue base, coupled with significant synergies arising from product enhancement, cross-sale, and efficiency opportunities. Nasdaq expects the transaction to meet the company’s 10% 3-5 year ROIC objective, and to be accretive to non-GAAP EPS within 12 months of closing.
Nasdaq will fund the acquisition with either cash on hand or liquidity available under existing credit facilities, and remains committed to the existing capital deployment priorities, including funding attractive organic investment opportunities, continuing its dividend growth and share repurchase objectives, as well as achieving a “mid-2x’s” gross debt to EBITDA ratio by mid-2019.
Nasdaq expects to acquire Cinnober through a recommended public cash offer that was launched this morning at 08.01 CET whereby Nasdaq, through a wholly owned subsidiary, has offered to acquire all outstanding shares and warrants in Cinnober at a price of SEK 75 per share and SEK 85 per warrant.2 The transaction represents an offer value of approximately SEK 1,702m (appr. USD 190m).3 The Board of Directors of Cinnober has unanimously recommended that shareholders and warrant holders accept the offer. The acceptance period of the public tender offer is expected to close during the fourth quarter of 2018, subject to certain conditions customary in Swedish public tender offers (e.g. that Nasdaq becomes owner of more than 90% of the shares in Cinnober and review by relevant competition authorities).