Fintech VettaFi Joins TMX Group in High-Profile $1.4 Billion Deal

<p>TMX Group
Limited, the owner of the Toronto Stock Exchange, has announced that it will
acquire the remaining 78% stake in VettaFi Holdings LLC for $1.15 billion USD (CAD1.4
billion). Together with TMX's previous 22% strategic investment in VettaFi
earlier this year, the total value of the acquisition is $1.03 billion USD
(CAD1.40 billion).</p><p>TMX Group Announces $1.4
Billion Acquisition of VettaFi</p><p>VettaFi is
a US-based firm providing indexing, analytics, digital distribution and other
data services to the ETFs and asset management industry. According to the
release, the acquisition accelerates TMX Group's strategy to expand recurring
revenue sources and its data-driven product capabilities.</p><p>The
purchase price values VettaFi at 15.4 times the expected 2024 adjusted EBITDA, with
over 80% recurring revenue. TMX expects the deal to be accretive to adjusted
EPS within the first year. The <a href="https://www.financemagnates.com/terms/a/acquisition/">acquisition</a> will be financed through $1 billion in
committed bank debt and is expected to close in January 2024.</p><p>"The
experience of working together this year has confirmed that TMX and VettaFi are
a powerful combination and a tremendous culture fit," said John McKenzie,
the CEO of TMX Group. "Moving forward, the addition of VettaFi increases
the depth and value of data-driven insights we provide to clients."</p><blockquote><p lang="en" dir="ltr">Huge ETF industry news…TMX buying VettaFi.via <a href="https://twitter.com/decloet?ref_src=twsrc%5Etfw">@decloet</a> <a href="https://t.co/ZRSv5BHtc0">pic.twitter.com/ZRSv5BHtc0</a></p>— Nate Geraci (@NateGeraci) <a href="https://twitter.com/NateGeraci/status/1735166415819395312?ref_src=twsrc%5Etfw">December 14, 2023</a></blockquote><p>VettaFi
will operate within TMX Group's Global Solutions, Insights &amp; Analytics
division following closure of the transaction. "I am excited for VettaFi's
clients, partners and employees as we begin this next chapter. Together, we
will make markets and each other better,” commented Leland Clemons, the CEO of VettaFi.</p><p>According
to the press release, the acquisition of VettaFi by TMX Group is expected to
close in January 2024, assuming the deal satisfies typical closing
requirements. Ultimately, this is a strategic investment in strengthening TMX Group's offerings to ETF providers, positioning Canada more competitively in the global ETF industry.</p><p>Moreover, this marks another investment in a similar US-based company over the
past year. In February 2023, the operator of the Canadian exchange <a href="https://www.financemagnates.com/fintech/canadas-tmx-group-makes-strategic-investment-in-etflogic/" target="_blank" rel="follow">announced
the acquisition</a> of a minority stake in ETFLogic, a <a href="https://www.financemagnates.com/terms/f/fintech/">fintech</a> firm and provider of
analytics and portfolio tools for investment fund manufacturers.</p><p>TMX’s November Volumes and
Q3 Financial Results</p><p>TMX Group
Limited recently disclosed its trading statistics for November 2023. This
report encompasses the activities of various marketplaces under its umbrella,
including the Toronto Stock Exchange</p><p>Last month,
TMX Equities Marketplaces registered a total volume of 10.3 billion contracts,
marking a slight increase from October's 9.4 billion but a decrease from
November 2022's 12.6 billion. The total value of trades reached $212 billion, showing
a growth from October’s $199 billion.</p><p>In the
financial landscape of the third quarter of 2023, TMX Group Limited
demonstrated notable growth and resilience. The Group reported a revenue
increase to $287.3 million, up 8% from Q3 2022’s $266.8 million. This revenue growth was reflected in the diluted earnings per share, which rose to $0.31, a
7% increase from the previous year's $0.29. </p><p>“Higher
overall revenue was driven by double-digit, year-over-year growth from Global
Solutions, Insights and Analytics, including Trayport and TMX Datalinx, and
increased revenue from Derivatives Trading and Clearing, excluding BOX,” John
McKenzie, the CEO of TMX Group, commented on the first nine months of 2023,
emphasizing TMX's enduring success through its strategy of diversification.</p>

This article was written by Damian Chmiel at www.financemagnates.com.