TMX Group Limited, the operator of the Toronto Stock Exchange, announced today (Wednesday) that it has completed its acquisition of the remaining 78% stake in VettaFi Holdings LLC. In combination with TMX's initial 22% investment made earlier this year, the total value of the VettaFi acquisition is $1.03 billion (CAD1.40 billion).
TMX Group Completes CAD1.4 Billion Acquisition of VettaFi
VettaFi is a leading US indexing, analytics and digital distribution firm serving the ETF and asset management industry. Over 80% of VettaFi's revenue is recurring, with the deal valuing the company at 15.4 times expected 2024 adjusted EBITDA. The information that the acquisition was agreed upon appeared in the middle of last month, and now both companies have finalized the process.
The purchase accelerates TMX Group's strategy to expand recurring revenue sources and data-driven product capabilities globally. "The addition of VettaFi increases the depth and value of data-driven insights we provide to clients," said John McKenzie, the CEO of TMX Group.
The acquisition was financed through $1 billion in committed bank debt and is expected to be accretive to TMX's adjusted EPS within the first year. This marks TMX Group's latest investment into the ETF ecosystem, having acquired a minority stake in ETFLogic, another US. fintech serving asset managers, in February 2023.
VettaFi will operate within TMX's Global Solutions, Insights & Analytics division. "Together, we will make markets and each other better," Leland Clemons, the CEO of VettaFi, commented.
TMX’s Recent Numbers
According to the most recent trading figures dating November 2023, the TMX Equities Marketplaces saw a total trading volume of 10.3 billion contracts. This number shows a modest rise from the 9.4 billion contracts traded in October, though it's a decrease compared to the 12.6 billion contracts from November of the previous year. The overall trade value for the month reached $212 billion, marking an increase from the $199 billion recorded in October.
Furthermore, TMX Group Limited exhibited significant growth in the third quarter of 2023. The Group's revenue escalated to $287.3 million, representing an increase of 8% from the third quarter of 2022. This uptick in revenue also positively impacted the diluted EPS, which climbed to $0.31.
