Bain Capital to Buy Envestnet in $4.5B Take-Private Deal
Envestnet, an RIA wealthtech platform, has agreed to be acquired by private equity firm Bain Capital in an all-cash deal worth $4.5 billion. Reverence Capital Partners, a private equity firm, has agreed to join in the acquisition, along with asset managers BlackRock, Fidelity Investments, State Street, and Franklin Templeton.
Envestnet shareholders will get $63.15 in cash for every share of common stock they own, representing a 2.3% premium over the company’s closing share price of $61.70. The acquisition is expected to close in the fourth quarter of 2024.
Ares Management, Blue Owl Capital, and Benefit Street Partners have agreed to providing debt financing for the acquisition, together with RBC Capital Markets, BMO Capital Markets, Barclays, and Goldman Sachs.
“Through its deeply connected ecosystem and innovative technology and data capabilities, Envestnet has built an industry-leading platform that the largest wealth management firms, RIAs and broker-dealers rely on to power their businesses,” said Phil Loughlin, a Partner at Bain Capital.
The acquisition comes more than a year after activist investor hedge fund Impactive Capital launched a public proxy fight against the firm, citing the company’s lackluster stock returns and “disappointing decisions” in previous years. The battle resulted in three new board members, including Impactive co-founder and Managing Partner Lauren Taylor Wolfe.
Envestnet was founded in 1999, went public in 2010, and has since evolved into a wealth management behemoth with over 20 million accounts and $6 trillion in assets. Through its integrated platforms, the company serves more than 800 asset managers and 109,000 financial advisors.
Morgan Stanley is Envestnet’s exclusive financial advisor, and Paul, Weiss, Rifkind, Wharton & Garrison is its legal counsel. J.P. Morgan Securities is serving as the principal financial advisor for Bain Capital, while Ropes & Gray is providing legal guidance.
Bain Capital manages around $185 billion in assets across private equity, credit, public equity, venture capital, and real estate.
This is the investment firm’s second significant take-private transaction in the last month. In early June, Bain Capital announced plans to acquire PowerSchool Holdings, a NYSE-listed provider of cloud-based software for K-12 education, for $5.6 billion. The acquisition is expected to close in the second half of 2024.