BERWYN, Pa. - Envestnet, Inc. (NYSE: NYSE:ENV), a prominent provider of integrated technology and wealth management solutions, has agreed to be acquired by private investment firm Bain Capital in a transaction valued at $4.5 billion, or $63.15 per share. The deal, which has been unanimously approved by Envestnet's Board of Directors, is expected to close in the fourth quarter of 2024, subject to shareholder and regulatory approvals.
Envestnet, which manages over $6 trillion in assets and supports nearly 20 million accounts, is recognized for its comprehensive wealth management platform used by more than 109,000 financial advisors. It was recently acknowledged by the 2024 T3/Inside Information Advisor Software Survey for its performance in several categories, including Financial Planning and Portfolio Management.
Jim Fox, Board Chair and Interim CEO of Envestnet, expressed pride in the company's achievements and its status as a leading wealth management platform.
Phil Loughlin and Marvin Larbi-Yeboa, Partners at Bain Capital, highlighted Envestnet's innovative technology and data capabilities as key factors in their investment decision, emphasizing their commitment to support the company's growth strategy. Milton Berlinski, Co-Founder and Managing Partner at Reverence Capital Partners, noted Envestnet's strategic positioning for growth, given its scale and competitive advantages in the industry.
Upon completion of the transaction, Envestnet will transition from a public to a private entity, with strategic partners including BlackRock (NYSE:BLK), Fidelity Investments, Franklin Templeton, and State Street (NYSE:STT) Global Advisors holding minority positions.
The acquisition aims to enhance Envestnet's platform, making it more customized, connected, and intelligent, according to Tom Sipp, EVP Business Lines of Envestnet. Bill Crager, Co-founder of Envestnet, sees the deal as a positive development for the company's clients and employees, preserving its entrepreneurial spirit.
Morgan Stanley (NYSE:MS) & Co. LLC and Paul, Weiss, Rifkind, Wharton & Garrison LLP are advising Envestnet, while J.P. Morgan Securities LLC and Ropes & Gray LLP are advising Bain Capital. Committed debt financing for the transaction is provided by several financial institutions, including RBC Capital Markets, BMO Capital Markets, Barclays (LON:BARC), and Goldman Sachs (NYSE:GS) & Co. LLC, with additional funding from funds managed by Ares Management (NYSE:ARES), Blue Owl Capital, and Benefit Street Partners.
This news is based on a press release statement from Envestnet.
In other recent news, Envestnet, a leading provider of intelligent systems for wealth management and financial wellness, has been the highlight of several recent developments. The company reported robust growth in its Q1 2024 earnings, with a 9% increase in revenue to $325 million and a significant rise in adjusted EPS by 30% to $0.60. Envestnet's adjusted EBITDA reached $70 million, signaling a strong financial performance.
In addition to this, DA Davidson maintained a Buy rating for Envestnet, with a price target of $78.00. This decision was driven by the company's strong Q1 results and the potential value that could be unlocked through strategic alternatives.
In the backdrop of these developments, analysts have highlighted Envestnet's solid market performance, with net flows of $32.7 billion marking the strongest since 2015. The company's partnership with FNZ, expected to scale in late 2024, is poised to further enhance its offerings in RIA and Trust solutions, as well as broker-dealer solutions.
InvestingPro Insights
As Envestnet, Inc. (NYSE: ENV) gears up for its transition to a private company under Bain Capital's wing, the financial community is closely monitoring its valuation and growth prospects. The latest data from InvestingPro reveals a mixed picture of the company's financial health. With a market cap of $3.4 billion and a negative P/E ratio of -17.32, reflecting its past unprofitability, Envestnet's financial metrics are crucial for potential investors and current stakeholders to consider.
Despite past challenges, Envestnet's future appears brighter according to InvestingPro Tips, which indicate that net income is expected to grow this year, with analysts predicting the company will become profitable. Additionally, 4 analysts have revised their earnings upwards for the upcoming period, signaling a positive outlook on Envestnet's financial performance. This optimism is further underscored by a solid revenue growth of 4.5% over the last twelve months as of Q1 2024, and an even more impressive quarterly revenue growth of 8.79% in Q1 2024.
Investors may also note that while Envestnet does not currently pay a dividend, its strategic positioning and innovative technology platform could be the catalysts for future growth, aligning with the positive sentiment expressed by analysts. For those interested in delving deeper, there are additional InvestingPro Tips available, which can be accessed by visiting https://www.investing.com/pro/ENV. To gain full access to these insights, use the coupon code PRONEWS24 to get up to 10% off a yearly Pro and a yearly or biyearly Pro+ subscription.
As the company prepares for its next earnings date on August 1, 2024, the investment community will be eagerly anticipating the impact of the acquisition on Envestnet's financials and its ability to leverage Bain Capital's resources to fuel its growth trajectory.
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