The TMX Group, which operates the Toronto Stock Exchange, revealed after the market close on Wednesday that it had agreed to buy the remaining 78% of VettaFi that it did not own for a total of US$848 (CAD$1.14 billion). Earlier this year, TMX acquired a 22% stake in VettaFi. VettaFi is a US-based firm specialising in indexing, analytics, and data services for the ETF and asset management industry. The $1.4 billion acquisition is aligned with TMX Group’s strategy to increase recurring revenue and enhance its data-driven product offerings.
TMX Group Acquires Remaining 78% Stake in VettaFi for $848 Million
Valued at 15.4 times its projected 2024 adjusted EBITDA, VettaFi boasts over 80% recurring revenue. TMX Group expects the acquisition to positively impact its adjusted earnings per share within the first year. The deal, financed through $1 billion in bank debt, is anticipated to be finalised in January 2024.
John McKenzie, the CEO of TMX Group, said: “The experience of working together this year has confirmed that TMX and VettaFi are a powerful combination and a tremendous culture fit. Moving forward, the addition of VettaFi increases the depth and value of data-driven insights we provide to clients.”
Scheduled to close in January 2024, pending standard closing conditions, this acquisition marks TMX Group’s strategic effort to bolster its services to ETF providers and position Canada more competitively in the global ETF market.
The move follows TMX Group’s earlier investment in February 2023, where it acquired a minority stake in US-based fintech firm ETFLogic.
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In related news, TMX Group Limited reported its November 2023 trading statistics, noting a total volume of 10.3 billion contracts, slightly up from October’s 9.4 billion but down from the previous year. The total trade value for the month reached $212 billion, indicating growth from October’s $199 billion.
For Q3 2023, TMX Group Limited showcased significant growth, with revenue rising to $287.3 million, an 8% increase from Q3 2022’s $266.8 million. This revenue boost was reflected in a 7% increase in diluted earnings per share, reaching $0.31 compared to the previous year’s $0.29.
CEO John McKenzie attributed this growth to diverse revenue streams, including Global Solutions, Insights and Analytics, and Derivatives Trading and Clearing.
