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Nasdaq's Friedman Bulks Up Board Business in $200 Million Deal

  • Exchange operator agrees to buy Boardvantage for cash, debt
  • Nasdaq has made a string of five purchases since October

Nasdaq Inc. agreed to buy Boardvantage, a business that allows corporate boards to exchange information, as Chief Operating Officer Adena Friedman helps continue a spate of dealmaking in an industry full of activity.

The New York-based exchange operator will pay $200 million in cash and debt for Boardvantage, according to a statement Monday, doubling the size of the corporate governance product it already offers. The transaction is expected to close in the first half, the statement shows.

The agreement is at least the fifth Nasdaq has announced since October, including its $1.1 billion acquisition of Deutsche Boerse AG’s International Securities Exchange, catapulting it to the top of the U.S. options market. Nasdaq has concentrated on bolt-on acquisitions even as its peers focus on broader consolidation. Deutsche Boerse said last week it agreed to acquire London Stock Exchange Group Plc, raising the possibility of counteroffers from Intercontinental Exchange Inc. and CME Group Inc.

“We have to follow our strategy,” Friedman said in an interview Sunday. “Our strategy is to continue to broaden out and expand the services we offer to the businesses we’ve created. And we believe what we’ve done to this point is the best way to do that.”

Nasdaq will combine Boardvantage with its Directors Desk, a tool that helps members of corporate boards communicate and share confidential information.

Directors Desk

Friedman, widely viewed as the heir apparent to Nasdaq Chief Executive Officer Robert Greifeld, said that with the addition of Boardvantage, Nasdaq will more than double the approximately 1,500 clients currently using Directors Desk.

Over the past several months, Nasdaq has bulked up several of its business through acquisitions. It purchased an investor relations business in Canada, the Chi-X Canada stock market and a platform for trading shares of private companies. Looking for other deals to help broaden its existing businesses is a strategy the company will continue to pursue, Friedman said. The company has homed in on technology as a particular avenue for growth, she said.

“If you look at everything we do, it’s in that vein,” Friedman said. “When we look at opportunities we do look holistically at how we can continue to grow and expand in the businesses we’re in,” she added. “We’ll continue to do that.” 

Directors Desk is part of Nasdaq’s corporate-services unit, under the umbrella of technology solutions. That group accounted for the second-largest part of the company’s revenue in 2015. Sales for the segment dropped 3 percent in 2015 compared with a year earlier.

In 2010, Directors Desk was attacked by Russian hackers, an incident that spurred a probe from the National Security Agency and Federal Bureau of Investigation. Since then, Nasdaq tripled the number of customers that use Directors Desk.

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