Nasdaq to buy Dorsey Wright for $225 million
Nasdaq OMX Group Inc. agreed to acquire index provider and analytics group Dorsey, Wright & Associates LLC for $225 million, as the exchange operator expands its exchange-traded fund and so-called smart-beta indexing segments to diversify its business.
The deal, which will be funded with a combination of cash on hand and debt, will make Nasdaq’s global indexes segment one of the largest providers of the fast-growing smart-beta indexes. Unlike traditional market capitalization weighted indexes, smart-beta shifts the index weightings based on certain factors.
“Our index business has been a strong growth area for Nasdaq over the last decade,” President Adena Friedman said.
The deal is expected to add to the company’s earnings after closing and shouldn’t affect financial leverage or capital return strategy, Nasdaq said.
Nasdaq NDAQ, -0.80% will now have DWA’s 17 exchange-traded funds in addition to its existing 69 smart-beta ETFs. Its global indexes will have nearly $45 billion assets benchmarked to its smart-beta indexes, and more than $105 billion benchmarked to all Nasdaq Indexes. The acquisition should also have opportunities for licensing, since DWA licenses to ETF providers First Trust and PowerShares.
Source: MarketWatch – Nasdaq to buy Dorsey Wright for $225 million
