Carlyle is preparing for a potential sale of Calastone, its UK-based fund network and data business, according to sources familiar with the matter. This move signifies the latest activity in a sector that has seen significant investment, attracting billions of pounds.
The US private equity firm has engaged Barclays to assist in exploring the sale of the London-based company. Calastone operates a marketplace for trading and settling investment funds, leveraging blockchain technology. It also provides valuable data on fund flows, offering insights into market trends. The sale process is in its early stages, with Carlyle anticipating an auction before summer.
Industry experts estimate Calastone could be valued at over 600 million pounds ($731.52 million), potentially reaching more than 20 times its earnings before interest, tax, depreciation, and amortization (EBITDA). This valuation is based on recent transactions in the financial technology and data sector, which has experienced significant growth and consolidation.
While a deal is not guaranteed, Calastone is expected to draw interest from global exchange and market infrastructure groups, as well as private equity firms. This potential sale follows a series of acquisitions in the specialized financial technology and data industry, where companies providing services to banks, asset managers, and investment groups have commanded high valuations. Notably, BlackRock acquired Preqin for 2.55 billion pounds in 2022, demonstrating the strong appetite for data-driven solutions in the financial sector.
Calastone: A Leading Fintech Player
Calastone boasts a vast network of over 4,000 fund distribution and fund manager clients across 57 countries, processing approximately 270 billion pounds in investment value monthly. The company employs blockchain and other technologies to automate traditionally manual processes, such as order routing, settlement, and transaction reporting. These automated solutions address rising costs and inefficiencies faced by asset and fund managers.
Carlyle, which manages $447 billion in assets, acquired Calastone from venture capital investors Octopus Ventures and Accel in 2020. The financial details of the acquisition were not disclosed. Calastone’s management team, led by CEO Julien Hammerson, retains a minority stake in the business.
Calastone reported revenues of 68.3 million pounds in 2023, a notable increase from 60.3 million pounds in the previous year, according to filings with Companies House. This growth underscores the company’s strong performance and potential for further expansion.
Conclusion: A Promising Future for Calastone
The potential sale of Calastone highlights the ongoing consolidation and investment within the financial technology and data sector. Given its robust technology platform, extensive client network, and strong financial performance, Calastone is positioned to attract significant interest from potential buyers. The outcome of this potential sale will be closely watched by industry participants as a barometer of market sentiment and valuation trends. This transaction could mark another significant milestone in the evolution of the financial technology landscape.
