By Robb M. Stewart

Clearwater Analytics struck a deal to buy software company Enfusion in a deal worth $1.5 billion, bolstering its efforts to build a cloud platform for the investment-management industry.

The companies have signed a definitive agreement offering Enfusion shareholders the equivalent of $11.25 a share in cash and stock, marking a 13% premium to the last closing price and 32% above where Enfusion was trading in September before media reports suggesting a potential sale.

Clearwater is expected to pay about $760 million in cash and issue between roughly 23 million and 28 million new shares to Enfusion shareholders. The company also will pay a further $30 million to retire Enfusion's tax receivable agreement.

With a merger of the software companies, Enfusion's front-office capabilities would be integrated with Clearwater's middle and back-office solutions and client-reporting capabilities. That, Clearwater said, will allow clients to avoid error-prone data handoff that happens between the front, middle and back office, which can create reconciliation issues resulting in inefficiencies, inaccuracies and increased risk.

Clearwater said it expects considerable efficiencies in general and administrative expenses, yielding about $20 million in cost savings that should be delivered over the first two and a half years after the close.

The deal is expected to close in the second quarter, subject to approval from regulators and Enfusion's shareholders. The agreement has been unanimously approved by a special committee of Enfusion directors independent of the company's tax receivable agreement holders, as well as by the boards of both companies.

Enfusion forecast preliminary 2024 revenue was about $201 million to $202 million, representing growth on the year before of 15% to 16%.

The planned tie-up comes after Clearwater last April closed a deal to buy financial services firm Wilshire Advisors for roughly $40 million.

Write to Robb M. Stewart at robb.stewart@wsj.com

(END) Dow Jones Newswires

January 13, 2025 07:09 ET (12:09 GMT)

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