Nasdaq announced on September 14 that it plans to acquire Cinnober, a major Swedish financial technology provider to crypto exchanges, brokers and clearinghouses worldwide. Nasdaq has made a $190 million all-cash recommended public offer to the warrant holders and shareholders of Cinnober. This acquisition of Cinnober by Nasdaq would strengthen its position as one of the world’s leading market infrastructure technology providers.
Adena Friedman, CEO and President, Nasdaq said that the combined technology competence, intellectual capital and capabilities of Cinnober and their Market Technology business will help in expanding the depth and breadth of their fastest growing division at Nasdaq.
Nils-Rober Persson, co-founder and Chairman of the Board of Directors, Cinnober said that the company became a leading supplier of financial technology providing services to trading houses and crypto exchanges worldwide. With Cinnober’s largely recurring revenue base, this acquisition is expected to deliver attractive shareholder returns. Nasdaq will be funding this acquisition with either liquidity or cash on hand available under the existing credit facilities. It is expecting to acquire Cinnober via a recommended public cash offer.
Nasdaq intends to remain committed to its existing capital deployment priorities. This includes continuing its dividend growth and share re-purchase objectives, funding attractive organic investment opportunities and achieving a “mid 2x’s” gross debt to EBITDA ratio by mid-2019, as mentioned in the GlobeNewswire report.
Cinnober is a prime candidate for the tech-heavy Nasdaq Corporation as it has developed in-house solutions and also because of its technology acquisitions. The concerns of large institutions are understandable considering a large number of exchanges that have been hacked in Bitcoin’s history. The most recent example is that of the Bancor exchange, as stated in the CCN report.
The custodian problem of crypto exchanges seems to have been solved according to many crypto experts, especially with cold storage and multi-signature technology. When big names like Nasdaq can provide tangible audits that traditional securities managers are accustomed to, legitimacy will automatically improve. Cinnober’s acquisition by Nasdaq is another box to check off in the race to provide the best and first publicly traded cryptocurrency vehicle.[The views and opinions expressed in this article are those of the authors and do not necessarily reflect the views and/or the official policy of the website. ]