Nasdaq is to acquire eVestment, an industry leading content and analytics provider used by asset managers, investment consultants and asset owners to help facilitate institutional investment decisions.
The acquisition is expected to deliver attractive shareholder returns with a combination of recurring, predictable revenue, a strong track record of growth and attractive cash flow dynamics.
eVestment provides institutional investors the largest, most comprehensive database for both traditional and alternative strategies, including as many as 2,800 individual data points on more than 74,000 investment vehicles. eVestment has more than 2,000 clients, including 92 per cent of the top asset managers, 76 per cent of the top consulting firms and 80 per cent of the top 20 pension funds
“The investment management community is relying increasingly on independent data and advanced analytics to drive their key business decisions, including asset allocation and investment choices. eVestment is the definitive source from asset managers of critical fund-level and investment-level data and analytics to enable asset owners to make informed decisions,” says Adena Friedman, President and CEO, Nasdaq. “The strategic alignment of eVestment with Nasdaq’s complementary technology and services to the global institutional investment industry, including our surveillance technology, SMARTS, our recent Analytics Hub launch, as well as our long standing operation of the Mutual Fund Quotation Service, will further expand our buy side relationships, accelerate our growth opportunities, and advance our objectives to deliver proprietary analytics to our clients.
“As a trusted steward of the capital markets industry, we view our partnership with eVestment as a means of strengthening Nasdaq’s support of the investment management industry through enhanced technology and service offerings. Additionally, Nasdaq’s global distribution will create opportunities to propel eVestment’s proprietary offering around the globe – creating a compelling value proposition for our clients and investors.”
eVestment will further enhance Nasdaq’s robust Global Information Services business by allowing the company to broaden its reach into the buy-side and leverage the extensive expertise of the leadership team. Nasdaq’s data and index operations, coupled with eVestment’s institutional focus, will result in the creation of new solutions and expanded distribution to support the asset management community.
“Our leadership team is excited to join Nasdaq. We believe the combined organszation will allow us to grow our core business while tapping into Nasdaq’s technology expertise, leading data and software products, and global distribution,” says Jim Minnick (pictured), Chief Executive Officer and Co-founder, eVestment. “We’ve grown this business at a 13 per cent annual growth rate since 2013, and together, we expect to produce new and expanded opportunities for our clients by combining our proprietary capabilities with Nasdaq’s core information services offerings.”
Subject to customary conditions and approvals, Nasdaq will acquire eVestment for USD705 million funded through a mix of debt and cash on hand. The deal is expected to close in the fourth quarter of 2017. The acquisition supports the company’s ambition to deliver double digit shareholder returns to shareholders. The company intends to reduce leverage towards its long-term debt/EBITDA targets, and it will continue to pursue its capital return objectives, including growing the dividend as earnings and cash flow grow, and executing the share buyback program with the primary objective of offsetting the impact of equity issuances.