Wachtell Lipton Rosen & Katz and Kirkland & Ellis have been called in for Nasdaq’s acquisition of Thoma Bravo-owned software company Adenza for $10.5bn. 

Wachtell is advising Nasdaq on the deal, which represents the exchange operator’s largest acquisition to date and comes as it pushes to diversify and become a more tech-focused business under chief executive officer Adena Friedman. Kirkland is advising longtime client Thoma Bravo and Adenza. 

Wachtell’s team was led by New York corporate partner duo David Lam and Mark Veblen and included partners David Kahan (compensation and benefits), Gregory Pessin (finance), Joshua Holmes (tax), Ian Boczko (insurance) and Ralph Levene (litigation) alongside a supporting cast of counsel and associates.

Along with Boczko, Holmes and Pessin, Lam and Veblen were also part of the Wachtell team that advised Nasdaq on its $2.75bn cash purchase of Canadian anti-financial crime software maker Verafin back in 2020. Verafin was advised by Toronto-based law firm Osler Hoskin & Harcourt, with Nasdaq also counselled on the matter by Canadian firm Blake Cassels & Graydon. 

Meantime the Kirkland team was led by corporate partners Peter Stach, Corey Fox and Brett Nelson and included capital markets partners Brad Reed, Michael Keeley and Cot Eversole, debt finance partners Fred Lim and Patrick Loughery, tax partners Kevin Coenen and Adam Kool and technology and intellectual property transactions partner Aaron Lorber alongside a trio of associates. 

The Adenza acquisition is the latest in a number of major deals on which Kirkland has advised Chicago-based Thoma Bravo, one of the largest private equity firms in the world with more than $114bn in assets. Last year alone Kirkland advised it on the sale of education software provider Frontline Education to Roper Technologies for $3.73bn, its $6.9bn acquisition of identity security firm SalePoint and its purchase of business planning software company Anaplan for $10.4bn. 

Thoma Bravo also hired veteran Kirkland partner Gerald Nowak as general counsel and chief administrative officer back in 2021, with Nowak departing the firm after 27 years according to his LinkedIn bio.

The latest deal will see Nasdaq acquire Adenza for $5.75bn in cash and 85.6 million shares of Nasdaq common stock. 

The exchange operator said Adenza, which provides risk management and regulatory software to banks and brokerages, is expected to bring in around $590m in annual 2023 revenue. 

“The addition of Adenza accelerates our ambition to modernise,” said Tal Cohen, president of market platforms, Nasdaq. “It also introduces a fast-growing $10bn serviceable addressable market to Nasdaq. 

“Since the implementation of Dodd-Frank in 2010, banks have increased their compliance costs by more than $50bn per year. With Adenza, we will have a more complete suite of essential software and technology solutions that make managing risks and complying with regulations simpler and more efficient for our clients. With complementary capabilities and geographic footprints, we can see a clear path to deepening our client relationships globally with leading end-to-end platforms across risk, trading and regulatory reporting,” Cohen added. 

Nasdaq said it would issue around 15% of its outstanding shares to the owners of Adenza upon completion of the deal, expected in six to nine months. 

The exchange operator also said it had obtained fully committed bridge financing for the cash portion of the transaction and plans to issue approximately $5.9bn of debt between signing and closing and use the proceeds to replace the bridge commitment.

Goldman Sachs and JP Morgan Securities are serving as financial advisors to Nasdaq, with Goldman Sachs serving as lead advisor. Bridge financing for the transaction has been provided by Goldman Sachs Bank USA and JPMorgan Chase Bank.

Meantime Qatalyst Partners is serving as lead financial advisor to Thoma Bravo and Adenza, along with Barclays, Citi, Evercore, HSBC Securities (USA), Jefferies and Piper Sandler.