Clearwater Analytics is set to acquire Enfusion – a software-as-a-service (SaaS) solutions provider for the hedge fund and investment management industry – for $1.5 billion.
Sandeep Sahai
The definitive merger agreement confirms that the purchase price will be delivered in an approximately equal mix of cash and stocks. Clearwater is expected to pay $760 million in cash and issue between 23 million and 28 million new shares to Enfusion shareholders.
The transaction is expected to complete in Q2 2025, subject to regulatory approvals.
This deal is understood to be a key step toward Clearwater’s plan of building the first cloud-native front-to-back platform for the entire investment management industry.
“Most importantly, this acquisition enables seamless data management from the front-office to the back-office, unlocking powerful network effects that amplify client value,” said Sandeep Sahai, chief executive of Clearwater Analytics.
According to Clearwater, around 66% of its core Total Addressable Market (TAM) stems from the asset management industry, yet this accounts for just a third of its overall revenue. Through the acquisition this is set to change, thanks to Enfusion’s next-generation platform which has been built for asset managers with a focus on the front-office.
Specifically, the strategic plan is to introduce front-to-back platform leadership. Enfusion’s front-office capabilities include: IBOR, portfolio and order management, all set to be incorporated into Clearwater’s middle and back-office solutions. This unified, and cloud-native, platform is set to enhance clients’ processes and improve efficiency.
“Together with Clearwater, our shared passion for building innovative technologies and enriching every aspect of the client journey will now accelerate and enhance our combined ability to support our clients’ evolving needs – whether they are expanding into new strategies, asset classes, or geographies,” said Oleg Movchan, chief executive of Enfusion.
In addition, the acquisition will allow Clearwater to expand into the hedge fund industry thanks to Enfusion’s established reach in the sphere. Through this expansion, the company’s TAM is expected to increase by $1.9 billion.
Furthermore, the deal opens the door for more global growth, said the firm which currently only has 18% of its revenue stemming from outside the US. Enfusion by comparison has 38% of its revenue generated in Europe and Asia.
Read more: Clearwater picks up Wilshire Advisors’ risk analytics platforms for $40 million
Sahai added: “Today’s announcement is about creating a future where our clients benefit from the synergy of two highly complementary, innovative software leaders, paving the way for a unified, cloud-native front-to-back platform that’s primed to serve institutional investors like never before.”