Clearwater Analytics Holdings Inc., a Boise, Idaho-based provider of investment and accounting software, has announced an agreement to go private in a deal valued at $8.4 billion. The transaction will see private equity firms Permira Holdings Ltd. and Warburg Pincus LLC acquire the company, supported by minority investors Francisco Partners Management LP and Singapore-based investment firm Temasek.
Under the terms of the agreement, Clearwater’s shareholders will receive $24.55 per share in cash - a 47% premium over the company’s $16.69 share price on November 10, prior to reports of a possible deal. The transaction is expected to close in the first half of next year, assuming no other bidders emerge during a "go-shop" period that runs until January 23. During this time, Clearwater is permitted to solicit and consider alternative offers, with an option to extend the window by up to 10 days for certain bidders.
A Strategic Move for Growth
Clearwater CEO Sandeep Sahai described the deal as a significant milestone for the company and its shareholders. "Both firms understand our business and the technology industry and have proven track records fostering growth for some of the largest and fastest-growing technology businesses globally", Sahai said.
Clearwater specializes in analytics software that automates investment accounting, performance tracking, compliance, and risk reporting. Its platform is designed to help organizations manage investment data efficiently and integrate artificial intelligence tools for more precise portfolio insights.
While some view the rise of AI as a challenge for Clearwater, sources suggest that Permira and Warburg Pincus see this acquisition as an opportunity to advance the company’s AI capabilities. This strategic focus could position the company for further innovation in the increasingly competitive financial technology market.
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A History with Private Equity Backing
This transaction marks a return to private ownership for Clearwater, which went public in 2021 with support from its private equity backers. Even after the initial public offering, Permira and Warburg Pincus remained majority shareholders before gradually reducing their stakes.
Clearwater’s stock has faced challenges since its IPO, with shares currently down 6% from the original offering price. In the year-to-date, the stock has lost more than 19% of its value. Last week, activist investor Starboard Value LLC disclosed a 5% stake in the company, expressing concerns over integration issues stemming from Clearwater’s $1.5 billion acquisition of financial software firm Enfusion Inc. earlier this year. Starboard also noted the stock’s undervaluation.
Transition to Private Ownership
If no competing bids emerge during the "go-shop" period, the acquisition is expected to finalize in 2026. Once the transaction closes, Clearwater will delist from public markets and continue operations as a privately held company.
The proposed deal highlights a pivotal moment for Clearwater Analytics as it seeks to leverage new opportunities under private equity ownership while navigating a shifting landscape in investment technology. The outcome of the "go-shop" period remains to be seen, but for now, the $8.4 billion agreement signals a renewed focus on long-term growth and innovation.
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