Clearwater Analytics, a company that develops accounting, compliance and risk reporting tools for asset managers; he said On Monday it entered into a definitive agreement to acquire investment management platform Enfusion for $1.5 billion.
Clearwater, which says it has taken out an $800 million loan to finance the transaction, along with a $200 million revolving credit line, will allow Enfusion shareholders to choose to receive cash, stock or a mix. Clearwater expects to pay $760 million in cash and issue approximately 23 million to 28 million new shares to Enfusion shareholders.
The boards of directors of both companies have agreed to the terms. If Enfusion’s shareholders and regulators approve, Clearwater expects the deal to close in the second quarter of 2025.
Chicago-based Enfusion was founded in 1997 as a technology and operations consulting firm. After noticing a gap in the market for a portfolio management system, Enfusion’s managing partners focused their efforts on launching the company’s current investment tool.
Enfusion has raised tens of millions of dollars in venture capital from investors including ICONIQ Growth and FTV Capital, which own 45% of the company along with Enfusion CEO Oleg Movchan. After going public in 2021, Enfusion was precious to $1.9 billion.
Clearwater claims its purchase, for which it is paying a 13% premium over Enfusion’s stock price on Jan. 10, is a wise one, pointing to Enfusion’s encouraging recent financials. Enfusion reported preliminary ~15% year-over-year growth in 2024 revenue to ~$201 million and preliminary ~13% year-over-year growth in annual recurring revenue to ~$210 million.
Clearwater also sees Enfusion as a means of building a “front-to-back platform for the entire investment management industry.” In one press releaseClearwater says it plans to integrate Enfusion’s portfolio and order management technology into its offerings while expanding into the hedge fund industry and geographies where Enfusion already has a presence.
Clearwater, launched in 2004, claims to have more than $7.4 trillion in assets on its platform. Notable clients include JP Morgan Asset Management, Facebook, Cisco and Oracle.
