Clearwater Analytics, a leading financial software provider, has announced a definitive agreement to acquire Enfusion, a provider of investment management software, in a transaction valued at $1.5 billion. The deal combines Clearwater’s strengths in post-trade solutions with Enfusion’s pre-trade expertise, creating a comprehensive platform for investment management.
This strategic acquisition underscores the growing trend of consolidation in the financial technology sector, where companies seek to expand their capabilities and market share through mergers and acquisitions. By integrating Enfusion’s solutions, Clearwater aims to strengthen its international presence and enter the lucrative hedge fund market.
Under the terms of the agreement, Enfusion shareholders will receive $5.85 in cash and $5.40 in Clearwater stock for each share they hold. This represents a total consideration of $11.25 per share, a significant premium to Enfusion’s recent trading price. The transaction values Enfusion at approximately $1.5 billion.
Clearwater CEO Sandeep Sahai emphasized the complementary nature of the two businesses, stating that Clearwater focuses on post-trade activities while Enfusion specializes in pre-trade operations. This combination will enable Clearwater to offer a more complete suite of solutions to its clients, encompassing order management, portfolio management, and risk management. The acquisition allows Clearwater to quickly integrate these functionalities rather than undertaking a lengthy and resource-intensive in-house development process.
Enfusion, which primarily serves hedge funds, anticipates revenue of $201 million to $202 million in 2024. The company provides mission-critical software for investment funds, enabling them to manage their portfolios and mitigate risks effectively. The acquisition price represents a 32% premium to Enfusion’s closing share price on September 19th, the day Reuters first reported on the potential sale.
Prior to the agreement with Clearwater, Enfusion had attracted interest from several other potential acquirers, including prominent private equity firms. Key shareholders representing approximately 45% of Enfusion’s voting power, including those affiliated with FTV Management Company and ICONIQ Growth, along with Enfusion CEO Oleg Movchan, have expressed their support for the transaction.
J.P. Morgan Securities and Kirkland & Ellis acted as financial and legal advisors to Clearwater Analytics, respectively. Goldman Sachs and Dechert provided financial and legal advice to Enfusion’s special committee, while Goodwin Procter advised Enfusion. The transaction is expected to close in the second quarter of 2025, subject to customary closing conditions and regulatory approvals.
