Broadridge Financial Solutions Inc. plans to spend $2.5 billion to purchase a Swedish company whose software facilitates the trading of stocks, bonds and other investments, officials said.
The Lake Success company has signed a definitive agreement to buy Itiviti Holdings AB in Stockholm from the private equity firm Nordic Capital. The purchase price is just over half of Broadridge’s 2020 revenue of $4.5 billion.
The deal is expected to close in the April-June period, according to the officials. Broadridge is Long Island’s second-largest public company by revenue.
The Itiviti acquisition brings software for executing buy and sell orders in stock exchanges and other capital markets. Broadridge already records and produces reports about the transactions.
"Itiviti significantly strengthens our capital markets franchise and better enables Broadridge to help financial institutions adapt to a rapidly evolving marketplace," Broadridge CEO Timothy C. Gokey said Monday in announcing the deal.
He said Itiviti’s presence in Asia, Africa, Europe and the Middle East would complement Broadridge’s dominant position in North America.
Itiviti traces its roots to Orc Software, founded in 1989 for trading Swedish derivatives. Today, the company has offices in 16 countries and 1,000 employees. Its customers include most of the top investment banks and more than 2,000 stock brokerages.
Itiviti CEO Rob Mackay said "joining Broadridge" will create "a leading front-to-back capital markets technology and operations provider." He said he would stay after the deal is completed.
Itiviti, which had revenue of about $250 million last year, will be part of Broadridge’s Global Technology and Operations division, which had revenue of $200 million.
Broadridge has been expanding the technology and operations division for several years with small acquisitions. Even with the addition of Itiviti, the division still will be smaller than Investor Communications, which distributes proxy statements, annual reports and other documents to shareholders on behalf of public companies and mutual funds.
The communications unit, which operates several large processing facilities on Long Island, in Edgewood, also was enlarged through an acquisition. In 2016, Broadridge paid $410 million to purchase a competitor: the North American Customer Communications division of DST Systems Inc. of Kansas City, Missouri.
That deal gave Broadridge access to more than 75% of the shareholder mailboxes in the United States and Canada, then-Broadridge CEO Richard J. Daly said.
Broadridge shares closed up $3.87, or 2.5%, to $157.31 on the New York Stock Exchange on Monday.
Broadridge has more than 12,000 employees in 17 countries, including 2,300 on Long Island.