Verafin's anti-financial crime management products will work with Nasdaq's regulatory technology leadership to form a global SaaS leader in the battle against financial crime.
A focus on anti-financial-crime technology and platforms led to Verafin, and Friedman said they concluded the Canadian firm, which deliberately built its customer base from small banks to larger ones in North America, is "the best of the group".
Verafin's capabilities will be available to the global network of almost 250 banks, exchanges, broker-dealers and buy-side organizations, and regulatory authorities that rely on Nasdaq's technology to detect market manipulation and abuse today.
Nasdaq will finance the transaction, which will add to its earnings per share beginning in 2022, with a combination of US$2.5 billion of debt and cash on hand.
Nasdaq's investment will help Verafin expand its position as an economic and technology leader from its base in St. John's and within the province of Newfoundland and Labrador.
Friedman also said the deal means the buyer is "committed to supporting innovation and growth in St. John's and Newfoundland and Labrador".
"Verafin's innovative fraud and anti-money laundering detection platform, combined with Nasdaq's leading trade and market surveillance solution, will empower Nasdaq to play an increasingly important role in building stronger economies around the world", said Friedman.
Many banks are using old systems that aren't very effective at detecting money laundering and financial crime, Valerie Bannert-Thurner, a senior vice president at Nasdaq, said in an interview.
Brendan Brothers is one of the co-founders of Verafin, a St. John's-based company that was sold to Nasdaq, it was announced Thursday.
The deal will mean Nasdaq's investment in Verafin will bring their product to larger-tiered banks and financial clients on an global scale.
Nasdaq said the transaction would strengthen its efforts to eradicate financial crime and money laundering.
Verafin was founded in 2003 and was initially part of Memorial University's Genesis Centre, an innovation hub for new businesses.
"Nasdaq's clear commitments to the province will help foster prosperity and opportunity throughout the community as we continue to grow our business". The company also announced a new $1-million research and development partnership project with the Genesis Centre. Verafin is expected to deliver at least $140 million in revenue to Nasdaq in 2021.