The acquisition, purchased from Research Affiliates Global Holdings, integrates RAFI’s portfolio of more than 90 licensed indexes into the TMX VettaFi arm. TMX anticipates the deal will be accretive to adjusted earnings per share within the first year of closing. To fund the purchase, the company plans to utilize debt financing, with the transaction expected to clear regulatory hurdles by the end of the third quarter.
In section Market Quotes
TMX Group Expands Indexing Reach with $490 Million RAFI Acquisition
The parent company of the Toronto Stock Exchange is betting $490 million on the index provider RAFI Indices, a strategic pivot designed to triple its assets under indexing to $263 billion and diversify its revenue streams away from the volatility of traditional trading and clearing operations.
Analysts view the move as a calculated effort to bolster the firm’s global insights segment. Stephen Boland of Raymond James noted that the acquisition leverages robust cash flow from TMX’s core business to secure a more stable, long-term revenue mix. This strategy aligns with the firm’s recent aggressive expansion in the indexing space, which includes the full acquisition of VettaFi earlier this year and the purchase of specialized infrastructure and nuclear index suites. Peter Conroy, chief executive of TMX’s global insights business, stated that the integration of RAFI’s intellectual property with TMX’s proprietary technology platform will significantly broaden the range of fundamental strategies available to partners.
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