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Nasdaq Strengthens Governance Solutions With CBE Buyout

Zacks Equity Research

Nasdaq NDAQ has acquired Center for Board Excellence (CBE) to extend its reach within the boardroom by providing technology solutions.

Established in 2010, CBE is a privately-held provider of corporate governance and compliance solutions for boards of directors, CEOs, corporate secretaries and general counsels. Its portfolio of solutions includes board and committee assessments, director peer assessments, CEO and management evaluations, directors’ & officers’ questionnaires, and other compliance questionnaires. Nasdaq has been in a partnership with CBE for the last two years.

Nasdaq Governance Solutions, with the help of Nasdaq Boardvantage and Directors Desk, has been helping public, private, and non-profit organizations to manage corporate governance practices. The addition of CBE hence should complement its operations.

Nasdaq intends to combine CBE with its Nasdaq Governance Solutions business operating board portal and collaboration technology solutions. Governance Solutions businesses and Investor Relations Intelligence consists Nasdaq’s Corporate Solutions business. Corporate solutions revenues increased slightly in the second quarter of 2019 driven by higher governance solutions (formerly board & leadership) revenues. Thus, addition of CBE to Nasdaq’s portfolio should help retain the growth momentum.

Nasdaq has grown meaningfully over the years through a number of strategic expansions. Its acquisition list remains impressive with Cinnober, Quandl, Marketwired, Boardvantage, among other notable buyouts The company’s M&A activity expanded its technology offering, fortified its Corporate Solutions business, improved its market surveillance techniques as well as boosted its global information services business.

Shares of this Zacks Rank #2 (Buy) leading provider of trading, clearing, marketplace technology, regulatory, securities listing, information and public and private company services have rallied 19.1% year to date, outperforming the industry’s 17.1% increase. Strategic initiatives pursued to grow through acquisitions as well as organic initiatives should help the stock continue the bull run.

Other Stocks to Consider

Investors interested in the finance sector can look at CME Group CME, MarketAxess Holdings MKTX and American Financial Group AFG. Each of these stocks carries a Zacks Rank #2. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

CME Group is a leading futures exchange in the world in terms of trading volume as well as notional value traded. The company came up with four-quarter average positive surprise of 1.27%.

MarketAxess is a leading multi-dealer trading platform that offers institutional investors access to global liquidity in products like U.S. high-grade corporate bonds, emerging markets and high-yield bonds, European bonds, U.S. agency bonds, credit derivatives and other fixed-income securities. The company came up with four-quarter average positive surprise of 3.51%.

American Financial provides property and casualty insurance products in the United States. The company came up with four-quarter average positive surprise of 4.70%.

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