Clearwater to Acquire Enfusion for $1.5 Billion, Expanding Investment Management Capabilities
Clearwater Analytics, renowned for crafting advanced accounting, compliance, and risk reporting solutions for asset managers, has announced a significant acquisition. On Monday, the company revealed a definitive agreement to purchase Enfusion, a leading investment management platform, for $1.5 billion.
To finance this acquisition, Clearwater has secured an $800 million loan coupled with a $200 million revolving credit line. Enfusion's shareholders will have the option to receive this transaction's payout in cash, stocks, or a combination of both. Clearwater anticipates disbursing around $760 million in cash and issuing between 23 to 28 million new shares to Enfusion shareholders.
The boards of both companies have endorsed the transaction terms. Pending approval from Enfusion's shareholders and relevant regulatory bodies, Clearwater projects that the deal will conclude by the second quarter of 2025.
Enfusion's Journey and Market Presence
Founded in 1997 in Chicago as a technology and operations consultancy, Enfusion shifted its focus to fill a market gap with its portfolio management solutions. In its journey, it attracted significant venture capital investments from Iconiq Growth and FTV Capital, who, along with CEO Oleg Movchan, control 45% of the company. Enfusion’s initial public offering in 2021 pegged its valuation at $1.9 billion.
Strategic Acquisition Rationale
Clearwater is offering a 13% premium over Enfusion’s stock price as of January 10, underscoring its strategic interest. Enfusion's financial health is promising, reflected in its preliminary reports of approximately 15% year-over-year revenue boost in 2024 to about $201 million. Its annual recurring revenue also saw a growth of around 13% to roughly $210 million.
This acquisition aims to create a comprehensive investment management platform. “A front-to-back platform for the entire investment management industry,” Clearwater touted in a recent press release. The company plans to blend Enfusion’s portfolio and order management tech into its lineup, further penetrating the hedge fund sector and expanding in regions where Enfusion operates.
Clearwater's Established Influence
Since its inception in 2004, Clearwater has amassed over $7.4 trillion in assets on its platform. Its esteemed clientele includes industry heavyweights such as J.P. Morgan Asset Management, Facebook, Cisco, and Oracle.