In a recent transaction, affiliates of Warburg Pincus LLC, a global private equity firm, have sold a significant stake in Clearwater Analytics Holdings, Inc. (NYSE:CWAN), a leading provider of investment portfolio data management and reporting services. The sale involved 7,000,000 shares of Class A Common Stock at a price of $19.71 per share, totaling approximately $137.97 million.
The transaction, dated June 12, 2024, was part of a series of moves by Warburg Pincus entities, which are also directors and ten percent owners of Clearwater Analytics. According to the filings, the shares were sold to an underwriter, who may offer the shares on the NYSE, over-the-counter market, or through negotiated transactions at market prices or at negotiated prices.
This sale follows the conversion of an equal number of Class D Common Stock into Class A Common Stock by the same entities, which did not involve any monetary transaction. Post these transactions, the reporting entities no longer hold any shares of Class A Common Stock, as indicated in the filings.
The entities involved in these transactions include WP CA Holdco, L.P., WP CA Holdco GP, LLC, Warburg Pincus (Callisto) Global Growth (Cayman), L.P., and several others, all of which are affiliated with Warburg Pincus LLC and have indirect ownership in Clearwater Analytics through various partnerships and management structures.
The reported transactions provide insight into the investment moves of major shareholders in Clearwater Analytics and reflect changes in ownership that could be of interest to investors and market watchers.
In other recent news, Clearwater Analytics has reported robust growth in Q1 2024 with a 21% increase in revenue to $102.7 million and a significant EBITDA rise of 42.9% to $32.2 million. These recent developments are attributed to low churn rates, high net promoter scores, and the successful addition of new clients. The company's recent acquisition of Wilshire Advisors' risk performance and analytics platforms has further enhanced its capabilities, contributing to its strong financial performance. Clearwater has exceeded its revenue and EBITDA guidance for the quarter and has raised its full-year revenue and EBITDA guidance for 2024. Despite concerns about Q2 guidance due to the early go-live of a large client in Q1, the company's gross margin reached a record high of 78%, and strategic acquisitions and high client retention rates are expected to continue driving momentum. The company's CEO, Sandeep Sahai, emphasized the strategic importance of the Wilshire acquisition and noted improvements in revenue and expense efficiencies from investments in Gen AI.
InvestingPro Insights
Clearwater Analytics Holdings, Inc. (NYSE:CWAN) has recently seen significant activity from major shareholders, notably from affiliates of Warburg Pincus LLC. To provide further context to these investment moves, InvestingPro offers some insights into the company's financial health and market performance.
InvestingPro Data shows that Clearwater Analytics has a Market Cap of approximately $4.94 billion and is trading at a high Price / Book multiple of 13.46 as of the last twelve months leading up to Q1 2024. Despite a negative P/E Ratio of -240.85, the company has demonstrated a strong Revenue Growth of 21.76% during the same period. Moreover, the stock has experienced a robust 3 Month Price Total Return of 16.66%.
An InvestingPro Tip highlights that analysts predict Clearwater Analytics will be profitable this year, which may reassure investors following the recent selling activity by Warburg Pincus. Additionally, the company operates with a moderate level of debt and has liquid assets that exceed short-term obligations, suggesting a solid financial position for the near term.
For investors looking for more in-depth analysis and additional InvestingPro Tips for Clearwater Analytics, there are currently 13 more tips available at https://www.investing.com/pro/CWAN. These tips could provide valuable guidance for making informed decisions, especially in light of the recent ownership changes.
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