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Verafin, a St. John’s-based online security and anti-fraud company, will be sold to global tech giant Nasdaq for $ 2.75 billion, the companies announced Thursday.
In a statement, Nasdaq said the deal between the two companies will combine Verafin’s products with Nasdaq’s international reach to make them a global leader “in the fight against financial crime.”
Verafin, founded in 2003 by Brendan Brothers, Jamie King and Raymond Pretty, works with nearly 3,000 banks and credit unions in Canada and the United States to detect activities such as fraud and money laundering.
The deal will see Verafin’s technology made available to the Nasdaq’s global network of nearly 250 banks, exchanges, investment firms and regulators who rely on Nasdaq’s technology to detect market manipulation and abuse, the statement said.
Combining the global reach of @Nasdaq and the consolidated technological leadership with @ Verafin , we will be able to offer our customers a suite of next-generation solutions to combat financial crime.
& mdash;@Nasdaq
“The intelligent technology solutions Verafin has created are second to none, and this is evident in the company’s tremendous growth and stellar customer retention,” Adena Friedman, president and CEO of Nasdaq, said in a press release.
Staying in St. John’s
The deal promised to boost the province’s thriving tech sector.
“We are committed to supporting innovation and growth in St. John’s, Newfoundland and Labrador. We believe Verafin will not only complement and grow our existing presence in Canada, but will also be a potential catalyst for further investment opportunities in the province and in the country, “Friedman said in the statement.
During an investor call Thursday morning, Friedman said around $ 2 trillion a year is laundered and “financial crime, including money laundering, is among the biggest and most difficult challenges banks face across the globe. world”.
Friedman said about $ 42 billion is being invested in the financial anti-crime space – $ 12.5 billion in technology, with a number that is expected to grow every year.
With a market penetration rate between Verafin and Nasdaq estimated at only three percent, Friedman said there is “an incredible amount of opportunity” for the firm.
Verafin’s current clients are all based in North America, Friedman said, while about two-thirds of Nasdaq’s surveillance revenue comes from larger clients outside the United States.
The deal will mean that Nasdaq’s investment in Verafin will bring its product to larger banks and financial clients on an international scale.
“We have a really great opportunity to bring them into our banking clients across Europe,” Friedman said.
Verafin’s headquarters will remain in St. John’s, Nasdaq said, and the company’s executive management team will remain in place.
The Nasdaq also said it will invest in a new $ 1 million research and development partnership project in the United States with the Genesis Center, an innovation hub based at St. John’s Memorial University that provides startup support in the province.
It will also grow a scholarship program at Memorial University, including funding and overseeing six scholarships for masters and doctoral students “to foster the next generation of talent in the province and help support the growing employment base. by Verafin “.
In the statement, Verafin CEO Jamie King called the deal “an important vote of confidence and a significant victory for the province of Newfoundland and Labrador’s technology and innovation sector.
“Nasdaq’s clear commitments to the province will help promote prosperity and opportunity throughout the community as we continue to grow our business.”
The sale is still subject to regulatory approvals and other customary closing conditions and is expected to close in early 2021. Verafin is expected to provide at least $ 140 million in revenue to Nasdaq in 2021.
Read more articles by CBC Newfoudland and Labrador
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