City of Milan wins
NEW YORK (Reuters) – Enfusion, a U.S. software provider for wealth managers, is in talks with investment bankers to evaluate options, including a possible sale, people with knowledge of the matter said.
The Chicago company, which has a market value of $1.1 billion, decided in recent weeks to interview investment banks after receiving acquisition requests from potential buyers, including private equity firms, one of the people said, speaking on condition of anonymity because the matter is confidential.
Enfusion has not yet initiated a sale process and it is possible the company will choose to remain independent, the sources added. Enfusion did not immediately respond to requests for comment.
The company’s shares rose as much as 19% on the news, prompting a brief trading halt on Friday.
This isn’t the first time Enfusion has held talks to explore a deal. Reuters reported last year that Enfusion had interest in acquisitions from several potential buyers, including Francisco Partners, Vista Equity Partners and Irenic Capital Management.
Enfusion, whose client base is primarily hedge funds, provides cloud-based portfolio management and risk systems to mutual funds. The firm has been trying to win more business from larger funds and firms with complex operations as it has struggled to get a bigger share of revenue from existing clients.
Shares of Enfusion, which have been trading in New York since its 2021 IPO and have lost more than 50% of their value since then, fell about 12% from the beginning of the year to yesterday’s close, underperforming the S&P 500 Application Software index, which has been about flat on concerns about customer spending cuts.
The company reported 16% year-on-year revenue growth to $49.5 million in the latest quarter, below market expectations.
Investment companies FTV Management Company and ICONIQ Capital jointly own a stake of approximately 50% in Enfusion.
Earlier this year, Spruce Point Management took a short position in Enfusion, saying the investment firm did not believe the company was a high-quality software provider and said its revenues had a “high risk of misrepresentation.”
(Reporting by Milana Vinn in New York; additional reporting by David French; editing by Daniel Wallis and Nick Zieminski)