In a bid to bolster its exchange-traded fund (ETF) business, Nasdaq OMX Group Inc. is buying index provider and analytics firm Dorsey, Wright & Associates, LLC, for US$255 million, the

The acquisition, which will be funded through a mix of debt and cash, is expected to be accretive to

Nasdaq’s earnings upon closing, excluding transaction-related costs, the firm said Monday.

Nasdaq says that it does not expect a material impact on its financial leverage or capital return strategy. The transaction is expected to close in the first quarter of 2015.

Nasdaq says that the deal will bolster its business of providing model-based strategies and analysis to the financial advisor community, and will strengthen its position as a provider of “smart beta” indices in the U.S. Combining DWA’s 17 ETFs and Nasdaq’s 69 smart-beta ETFs, Nasdaq Global Indexes will have nearly US$45 billion in assets benchmarked to its family of smart beta indexes and more than $105 billion benchmarked to all Nasdaq indexes.

“Our index business has been a strong growth area for Nasdaq over the last decade, and the acquisition of Dorsey Wright & Associates will further cement our position as a major player and industry innovator,” said Adena Friedman, president of Nasdaq. “We are always looking for opportunities to expand Nasdaq’s index offering with quality products that deepen our relationships with the investing community. DWA provides a natural complement to our business and growth strategy.”

Nasdaq says that it intends to fuel DWA’s growth strategy by accelerating product development, raising awareness of the DWA indexes, and increasing distribution. It expects the combination to lead to new products in more asset classes, including fixed income, currencies and commodities, and facilitate international expansion of the DWA offerings, beginning in Canada and Europe. It also sees opportunities to enhance DWA’s offerings to advisors “as the market continues to move toward model-based investing.”

Friedman added, “We intend to integrate the DWA team with our broader Nasdaq organization, leveraging DWA’s research expertise and deep relationships with the financial advisor community, and we expect to generate revenue synergies by deepening DWA’s licensing relationships with the ETF sponsor community globally.”

“Smart beta represents one of the fastest growing sectors within the ETF market,” said Tom Dorsey, President, Dorsey Wright & Associates. “This deal will allow us to grow significantly, while continuing to create products and strategies that meet the needs of our clients.”