Item 1.01. | Entry into a Material Definitive Agreement. |
Merger Agreement
On June 10, 2023, Nasdaq, Inc. (“Nasdaq”) entered into an Agreement and Plan of Merger (the “Merger Agreement”) by and among Nasdaq, Argus Merger Sub 1, Inc., a Delaware corporation and a direct wholly owned subsidiary of Nasdaq (“Merger Sub 1”), Argus Merger Sub 2, LLC, a Delaware limited liability company and a direct wholly owned subsidiary of Nasdaq (“Merger Sub 2”), Adenza Holdings, Inc., a Delaware corporation (“Adenza”), and Adenza Parent, LP, a Delaware limited partnership (“Seller”). Adenza and Seller are affiliates of certain funds managed by Thoma Bravo, L.P., a Delaware limited partnership (“Thoma Bravo”). Pursuant to the Merger Agreement, and upon the terms and subject to the conditions therein, Merger Sub 1 will merge with and into Adenza (the “First Merger”), with Adenza surviving the First Merger (the “Surviving Corporation”) and continuing as a wholly owned subsidiary of Nasdaq. Immediately following the First Merger, the Surviving Corporation will merge with and into Merger Sub 2 (the “Second Merger” and, together with the First Merger, the “Mergers”), with Merger Sub 2 surviving the Second Merger and continuing as a wholly owned subsidiary of Nasdaq. As a result of the Mergers, Nasdaq will acquire 100% of the stock of Adenza.
Nasdaq’s Board of Directors (the “Board”) has unanimously approved the Merger Agreement.
Merger Consideration
Subject to the terms and conditions of the Merger Agreement, the merger consideration payable to Seller at the closing will consist of (i) an aggregate of 85,608,414 newly issued shares of common stock, par value $0.01 per share, of Nasdaq (the “Stock Consideration”) and (ii) $5.75 billion in cash, subject to adjustment as set forth in the Merger Agreement (the “Cash Consideration”). Based on the volume weighted average price of Nasdaq common stock for the 15-day period ended on June 9, 2023, the Stock Consideration had a value of $4.75 billion, for an aggregate transaction value of $10.5 billion.
For U.S. federal income tax purposes, it is intended that the Mergers shall, as part of a single, integrated transaction, qualify as a “reorganization” within the meaning of Section 368(a) of the Internal Revenue Code of 1986, as amended, and the regulations promulgated thereunder.
Conditions to Closing
Under the terms of the Merger Agreement, the completion of the Mergers is subject to certain closing conditions, including: (i) the expiration of the waiting period applicable to the Mergers under the Hart-Scott-Rodino Antitrust Improvements Act of 1976, as amended, and the receipt of specified other regulatory approvals and clearances; (ii) the absence of any law, injunction, judgment or ruling of any governmental authority that would prevent or make illegal the consummation of the Mergers; (iii) the accuracy of the parties’ respective representations and warranties in the Merger Agreement, subject to specified materiality qualifications; (iv) compliance by the parties with their respective covenants in the Merger Agreement in all material respects; and (v) in the case of Nasdaq’s obligation to consummate the Mergers, the absence of a “Company Material Adverse Effect” (as defined in the Merger Agreement) with respect to Adenza on or after the date of the Merger Agreement that is continuing as of the closing date. Immediately following the execution and delivery of the Merger Agreement, Seller executed and delivered a written consent adopting and approving the Merger Agreement. The completion of the Mergers does not require approval of the Nasdaq stockholders.
Financing
In connection with the Merger Agreement, Nasdaq entered into a commitment letter, dated as of June 10, 2023, among Nasdaq, Goldman Sachs Bank USA (“GS Bank”) and JPMorgan Chase Bank, N.A. (together with GS Bank, the “Commitment Parties”), pursuant to which the Commitment Parties have agreed to provide, subject to the satisfaction of customary closing conditions, up to $5.7 billion of senior bridge term loans for the purpose of financing all or a portion of the Cash Consideration, repaying certain indebtedness of Adenza and its subsidiaries and otherwise paying related fees and expenses in connection with the Mergers and the transactions contemplated thereby.
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