(Bloomberg) — Nasdaq Inc. agreed to buy financial-software maker Adenza from its private equity owners in the exchange operator’s biggest-ever deal.

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The acquisition is valued at $10.5 billion in cash and stock, the Nasdaq said in a statement on Monday. Thoma Bravo, the buyout firm that owns Adenza, is set to get a 14.9% stake in the Nasdaq and a seat on the board as part of the deal, the company said. Nasdaq shares slumped as much as 11% Monday morning, their biggest intraday decline since March 2020.

Chief Executive Officer Adena Friedman said she is working to build up the exchange operator’s software business, which now accounts for more than a third of Nasdaq’s annualized recurring revenues. Software sales to financial firms are more predictable, insulating the business from trading volatility.

“We’re trying to make sure we’re buying the best-in-breed companies to solve and serve clients so that we can really be the best partner we can be to banks and brokers around the world,” Friedman said in an interview .

Adenza sells software to banks, asset managers, exchanges and other parts of the financial services industry that helps manage regulatory reporting, compliance and risk management. The business was formed in 2021 when Thoma Bravo merged Calypso Technology and AxiomSL.

Nasdaq, the second-largest stock exchange in the US, bills itself as a technology company. Beyond running the exchange, the New York-based firm offers data, analytics, software and other surveillance services to clients including publicly traded and closely held companies and investors.

Nasdaq has also been trying to become less dependent on transaction-based revenue and data tied to trading, which fluctuates, Friedman said. With the acquisition of Adenza, Nasdaq expects to increase its business solutions to 77% of total revenue from 71% today, with an even larger addressable market, he said.

The firm has been focused on diversifying its revenue sources beyond the exchange business, where shares in public companies trade. In recent years Nasdaq has made investments in software, data and other offerings. It also expanded technology tied to protection and anti-crime software through its acquisition of Verafin, with products that help investigate and report instances of money laundering, fraud and manipulation for banks and trading firms.

Read More: Nasdaq’s Earnings Beat Showcases Prescience of Software Push

Adenza, which has headquarters in London and New York, provides customers with end-to-end, trading, treasury, risk-management and regulatory-compliance platforms that can be provided on site or through the cloud. It has more than 60,000 users across global and regional banks, broker-dealers, insurers, asset managers, pension funds, hedge funds, central banks, stock exchanges and clearing houses, securities-service providers and corporates.

“As we looked at the challenges that the banks are facing managing their liquidity, in addition to the regulatory, compliance challenges, we see this as an opportunity that Adenza addresses,” Friedman said on a conference call with analysts. “It helps lift our conviction and excitement about the deal.”

Adenza has about $590 million of revenue estimated for this year. The purchase requires regulatory approvals and other customary closing conditions, and is expected to be completed within six to nine months, Nasdaq said.

Nasdaq plans to issue $5.9 billion of debt for the acquisition, which will bring its leverage to 4.7 times by the completion of the deal. It plans to reduce that leverage to 4 times within 18 months.

Shares of Nasdaq slid 9.8% to $52.18 at 9:39 am in New York, and are down 15% this year.

Bloomberg LP, the parent company of Bloomberg News, competes with Adenza in providing trading and risk solutions.

–With assistance from Ben Scent.

(Updates with disclaimer regarding Bloomberg in final paragraph.)

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