Financial software maker Enfusion explores options including sale, sources say
20/09/2024 19:07
(Adds share move in paragraph 4)
By Milana Vinn
NEW YORK, Sept 20 (Reuters) - Enfusion ENFN.N , a U.S.
software provider for asset managers, is in talks with
investment bankers to evaluate options that could include a
potential sale, according to people familiar with the matter.
The Chicago-based company, which has a market value of $1.1
billion, decided to interview investment banks in recent weeks
after receiving takeover interest from potential suitors
including private equity firms, one of the sources said,
requesting anonymity as the matter is confidential.
Enfusion has not launched a sale process yet and it is
possible that the company opts to stay independent, the sources
added. Enfusion did not immediately respond to requests for
comment.
Shares of the company jumped as much as 19% on the news
before trading was briefly halted on Friday.
This is not the first time Enfusion has held talks to
explore a deal. Reuters reported last year that Enfusion fielded
acquisition interest from several potential acquirers, including
Francisco Partners, Vista Equity Partners and Irenic Capital
Management.
Enfusion, whose customer base comprises mostly hedge funds,
provides cloud-based portfolio management and risk systems to
investment funds. The company has been attempting to win more
business from larger funds and corporations with complex
operations, as it has struggled to get a bigger share of
revenues from existing customers.
Enfusion's shares, which have been trading in New York since
their initial public offering in 2021 and have lost more than
50% of their value since then, were down about 12% from the
start of the year until yesterday's close, underperforming the
S&P 500 Application Software index that has remained roughly
flat, on concerns about its customers cutting spending.
The company reported year-on-year revenue growth of 16% to
$49.5 million in its latest quarter, falling short of market
expectations.
Investment firms FTV Management Company and ICONIQ Capital
collectively own a roughly 50% stake in Enfusion.
Earlier this year, Spruce Point Management took a short
position in Enfusion, as the investment firm did not believe the
company was a high-quality software provider and said its
revenue was at "high risk of misstatement."
(Reporting by Milana Vinn in New York; Additional reporting by
David French; Editing by Daniel Wallis and Nick Zieminski)
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