By Robb M. Stewart
TMX Group has struck a deal to buy index provider RAFI Indices for $490 million, a move that is expected to triple assets under indexing.
The parent of the Toronto Stock Exchange said after the market closed Thursday that it has reached an agreement to acquire RAFI from its founder, Research Affiliates Global Holdings.
The addition of RAFI will expand the equity portfolio coverage of the Canadian company's TMX VettaFi arm, increasing assets under indexing to about $263 billion from $81 billion. TMX also expects the acquisition will lift adjusted earnings per share within the first year of the deal closing, excluding any synergy benefits.
RAFI specializes in constructing, publishing and licensing indexes, and currently offers more than 90.
Stephen Boland, an analyst at Raymond James, said TMX continues to leverage cash flow generated by strong results in its market-driven business to accelerate growth within its global insights segment. The global insights business is less volatile than capital formation or trading and clearing, and Boland said a continued shift in TMX's revenue mix should support a higher valuation multiple over the long term for its shares.
As of March 31, RAFI' pro forma run-rate revenue was about $49 million, and adjusted earnings before interest, taxes and depreciations were roughly $38 million.
"By combining RAFI Indices' world-class intellectual property with our modern Index Factory technology and distribution platform, we are expanding the toolkit available to our partners to include some of the most respected fundamental strategies in the industry," said Peter Conroy, chief executive of TMX's global insights business.
TMX said the transaction is expected to be financed with debt. Completion of the deal is anticipated to close by the end of the third quarter, subject to regulatory approval.
TMX competed the full acquisition of VettaFi in January 2024, having first picked up a 21% stake a year earlier for $175 million. The business has made a number of other deals since, including acquiring and rebranding the Global Listed Infrastructure Organization family of indexes in March, and buying a suite of nuclear indexes from Range Fund Holdings and North Shore Indices last October.
Write to Robb M. Stewart at robb.stewart@wsj.com
(END) Dow Jones Newswires
June 12, 2026 07:58 ET (11:58 GMT)
Copyright (c) 2026 Dow Jones & Company, Inc.
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