TMX to buy RAFI indices from Research Affiliates for $490M

TMX Group has agreed to buy RAFI Indices from Research Affiliates Global Holdings for US$490 million (CAD683 million). The companies said the transaction is expected to close by the end of the third quarter of 2026, subject to regulatory clearances and customary closing conditions.

The acquisition will fold RAFI Indices into TMX VettaFi, TMX Group’s indexing business. TMX said the deal will more than triple TMX VettaFi’s assets under indexing, increasing AUI from about US$81 billion to roughly US$263 billion and expanding the firm’s equity index coverage and global distribution.

RAFI Indices operates more than 90 indices and uses fundamental, research-driven methodologies that weight securities by economic measures rather than price. The firm reported a pro forma run-rate revenue of approximately US$49 million and adjusted EBITDA of about US$38 million as of March 31, 2026.

TMX reported an implied total valuation of US$393 million net of expected tax benefits and a net present value of roughly US$97 million, mainly reflecting amortisable goodwill and intangible assets. The company said the acquisition is expected to be accretive to adjusted earnings per share within 12 months of closing, excluding potential synergies.

TMX plans to fund the purchase with debt. Including previously announced and pending transactions involving Cboe Australia and Cboe Canada, the company anticipates a pro forma leverage ratio of about 2.7 times immediately after close, with an intention to return to its target leverage range within one year.

Peter Conroy, TMX Group’s chief of Global Insights, described RAFI Indices as ‘a legacy of deep research and pioneering methodologies’ and said combining RAFI’s intellectual property with TMX VettaFi’s technology and distribution will expand the tools available to partners. Rob Arnott, founding partner and board chair of Research Affiliates, called the sale ‘an exciting new chapter’ and added that TMX’s resources and shared vision will help scale RAFI’s fundamental and newer cap-weighted strategies globally.