Dive Overview:
Wealth technology platform Envestnet has agreed to be acquired by Bain Capital and Reverence Capital in a $4.5 billion going-private deal. The company made the announcement on Thursday.
Under the terms of the transaction, approved by Envestnet’s board of directors, the company’s shareholders will receive $63.15 in cash for each common share they own.
The transaction is expected to close in the fourth quarter, subject to regulatory and Envestnet shareholder approval.
Dive Insights:
BlackRock, Fidelity, Franklin Templeton and State Street Global Advisors are among the minority partners. Envestnet After the transaction is completed.
Bain Capital Acquisition It will be funded with approximately $2 billion in debt.Two people familiar with the matter Financial TimesRoyal Bank of Canada, BMO, Barclays and Goldman Sachs are contributing to the financing package, while a consortium of private credit lenders led by Ares, Blue Owl and Benefit Street Partners will also provide debt financing.
“This is a testament to Envestnet’s proven ability to operate at market-leading scale by serving more assets, accounts and advisors and effectively connecting our firm with our technology,” Tom Shipp, executive vice president of business operations at Envestnet, said in a statement Thursday.
Headquartered in Berwyn, Pennsylvania, Envestnet manages more than $6 trillion in assets and about 20 million accounts. It has more than 109,000 advisors working on its platform. The company claims to have 17 of the largest U.S. banks and 48 of the top 50 wealth management and brokerage firms as customers through its integrated technology, along with software and data.
“Through our deeply connected ecosystem and innovative technology and data capabilities, Envestnet is committed to serving leading asset managers, [registered investment advisers] “Brokerage firms and broker-dealers rely on this technology to power their business,” Phil Loughlin, a partner at Bain Capital, said in a statement Thursday.
Milton Berlinski, co-founder and managing partner of Reverence Capital Partners, which manages about $10 billion in assets, said Envestnet’s large market presence combined with favorable industry trends creates a strong foundation for future expansion.
Envestnet is considering selling Yodlee, the data aggregator company it acquired in 2015 for about $590 million. Bloomberg reported in December.More recently, Envestnet has been looking for potential buyers for the entire company and has hired various investment banks to advise it on the sale of Yodlee and the company. Advent International and GTCR have also been eyeing a deal with Envestnet. Bloomberg reported In MayHe said this citing a source close to the matter.
Envestnet had been up for sale before: its co-founder and CEO, Judd Bergmann, died in a car accident in 2019. Envestnet’s other co-founder, Bill Kreiger, then took over the company.
Craiger resigned. He stepped down in March but remained with the company as a senior adviser, after Envestnet appointed Jim Fox as its head.
In another recent executive change, Envestnet hires former BlackRock alumnus Joshua Warren became CFO after Pete D’Arrigo retired in September.
Warren took on the reins at a time when Envestnet was battling economic challenges including “stubbornly low industry net asset flows, a headwind carried over from 2022,” Craiger said on an earnings call last year.
“We look forward to working with Envestnet’s talented and experienced management team to support the company’s growth strategy through organic and inorganic initiatives, further investing in its differentiated product offering and delivering increased value to clients and partners,” Marvin Raabi Yeboah, a partner at Bain Capital, which has approximately $185 billion in assets under management, said in a statement.
Envestnet plans to invest in making its platform more customizable and better connect with customers, Shipp said.
“As a privately held company, we can further improve our market-leading platform, deliver greater capabilities and an even broader solution set, and accelerate our ability to enable advisors to better serve their clients at every stage of their financial lives,” Shipp said Thursday.
