Clearwater Analytics will acquire investment management software company Enfusion for US$1.5 billion (A$2.4 billion).
Enfusion’s functions will be integrated with Clearwater’s financial technology to create a unified platform. Clearwater will purchase Enfusion for US$11.25 per share, in an equal mix of cash and stock.
“We expect to accelerate growth based on our increased right-to-win, higher back-to-base sales, greater presence across key geographies and increased Total Addressable Market (TAM),” said Clearwater CEO Sandeep Sahai.
“Coupled with our operating rigor and use of Generative AI, we have high confidence that we can drive meaningfully improved unit economics at Enfusion while also growing its emerging managed services business.”
As the purchase will enable Clearwater’s expansion into the hedge fund sector, Clearwater estimated it will increase the company’s total addressable market by US$1.9 billion.
While less than 18% of Clearwater’s revenue stems from outside the United States, 38% of Enfusion’s revenue is generated in Europe and Asia. Clearwater hopes the acquisition will facilitate its global adoption, the company said.
Clearwater also said the acquisition will yield around US$20 million in cost savings in the first two years after the deal’s close in 2025’s second quarter.
Enfusion began considering a sale in September, and fielded takeover interest from private equity and investment firms in 2023. Since its initial public offering in 2021, Enfusion’s shares have declined by more than 50%.
Clearwater Analytics' (NASDAQ: CWAN) share price closed at US$25.90, down from its previous close at $27.03. Its market capitalisation is $6.4 billion.
Enfusion’s (NYSE: ENFN) share price closed at US$10.81, up from its previous close at $9.94. Its market capitalisation is $1 billion.