Years of rumors have materialized after giant technology provider Envestnet announced it will return to private ownership through an acquisition by Bain Capital.
The transaction, which values Envestnet at $4.5 billion, or $63.15 per share, includes stakes from previous investors and strategic partners in the firm – Revenerence Capital, BlackRock, Fidelity Investments, Franklin Templeton and State Street Global, which will ultimately hold minority shares in the business.
Rumors of interest from Bain Capital first surfaced in a Reuters report in April citing confidential sources.
At the time, Envestnet had received interest from multiple private equity firms, including Bain Capital, sources told Reuters. It was also reported that Envestnet had hired Morgan Stanley to serve as its investment bank in the process and help navigate buyer interest, which today's statement confirmed.
The company's executives have been vocal for several years in the background about some of their frustrations with the limitations inherent in being a public company, and going private was referenced in today's statement along with the company's desire to “accelerate our ability to further elevated our market-leading platform with greater functionality and an even broader set of solutions.”
Envestnet currently works with more than 500 of the nation's largest RIA firms, and has over 109,000 advisors and more than $6 trillion in total assets on its platform.
“The board and its advisors conduct a process to maximize shareholder value,” said Jim Fox, chairman of the board and interim CEO of Envestnet, in a statement.
Bain Capital said in a statement that it would support Envestnet's growth strategy through organic and inorganic initiatives, as well as make additional investments in its various product offerings.
“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 businesses theirs,” said Phil Loughlin, a partner at Bain Capital. .
The transaction is expected to close in the fourth quarter of 2024, but is subject to approval by Envestnet shareholders and regulatory approvals.
This is a developing story and will be updated as details become available.