Nasdaq to offer senior notes to raise cash for Verafin acquisition
Nasdaq, Inc. (NASDAQ:NDAQ) today announced that it plans to offer senior notes.
The company expects to use the net proceeds from the offering, together with cash on hand and proceeds of other debt, to fund the cash consideration payable by Nasdaq in connection with its pending acquisition of Verafin Holdings Inc, to repay certain outstanding indebtedness of Verafin and its subsidiaries and to pay related expenses, and for general corporate purposes.
J.P. Morgan Securities LLC, BofA Securities, Inc., Goldman Sachs & Co. LLC and Morgan Stanley & Co. LLC will act as joint book-running managers for the offering. The offering will be made pursuant to an effective shelf registration statement, previously filed by the company with the U.S. Securities and Exchange Commission (SEC).
Last week, Nasdaq said it had entered into an amended credit agreement in connection with the Verafin acquisition.
Let’s recall that, when the acquisition was first announced, Nasdaq said it intended to finance the transaction with a combination of $2.5 billion of debt and cash on hand and expects debt / non-GAAP EBITDA leverage to be approximately 3.9x pro forma for the transaction. Nasdaq intends to pursue its existing capital deployment plan, including dividend payments and share repurchases, consistent with past practice, and expects to de-lever over time to return to a leverage ratio consistent with its current investment grade ratings.
The transaction is subject to regulatory approvals and other customary closing conditions. Spectrum Equity, a leading growth equity investor based in Boston and San Francisco, and Information Venture Partners, a leading FinTech-focused venture capital firm based in Toronto, both significant investors in Verafin, have agreed to sell their stake as part of this transaction.
The deal is expected to close in the first quarter of 2021.