Envestnet Bought Out By Bain And Reverence For $4.5 Billion

Reverence Capital and Bain Capital have agreed to purchase Envestnet in a transaction that values the wealth management technology and data company at $4.5 billion.

Reverence and Bain are being supported by smaller investors such as State Street Global Advisors, Franklin Templeton, Fidelity Investments, and BlackRock.

Financial institutions and wealth managers use Envestnet’s data and software to assist in managing investments. The firm manages almost 20 million accounts, oversees over $6 trillion in assets, and is utilized by over 109,000 investment advisors. It includes 16 of the 20 largest US banks and 48 of the 50 biggest financial investment companies among its clients.

Bain Capital Intends To Upgrade Envestnet’s Technology

The deal, fully endorsed by the Envestnet board and expected to be finalized in Q4, will see stakeholders collect $63.15 in cash per share.

Bain and its allies, such as New York-based venture capital firm Reverence Capital, are preparing to invest in improving Envestnet’s technology. The firms also want to leverage the company’s size with registered investment consultants to integrate the wealth management industry.

Phil Loughlin, a partner from Bain Capital, stated that by utilizing its well-connected network and advanced tech and data abilities, Envestnet has created a leading platform. The biggest wealth management firms, broker-dealers, and RIAs use it to fuel their businesses.

Marvin Larbi-Yeboa, Bain’s partner, also commented on the collaboration. He said the team is excited to work with Envestnet’s experienced and talented leadership team and support their growth plans through inorganic and organic initiatives. He added that the firm plans to invest more in Envestnet’s unique products and provide improved value to its clients and partners.

Bain Capital Will Fund The Purchase With $2 Billion In Debt

According to two sources, Bain will fund the purchase with approximately $2 billion in debt. Big banks Goldman Sachs, Barclays, BMO, and RBC will contribute to the financing. Additionally, a loan will be led by private credit lenders, including Blue Owl, Ares, and Benefit Street Partners, a subsidiary of Franklin Templeton.

Last month, Envestnet stated it was joining forces with four investment professionals in the buyer group — with around $18.3 trillion in assets under their management. Envestnet plans to offer custom strategies and advice for wealthy investors.

Established in 1984, Bain Capital oversees about $185 billion in assets through several investment strategies such as real estate, venture capital, public equity, credit, and private equity.

This is the second notable take-private deal declared by the company in the past month. In June, Bain Capital announced it would purchase PowerSchool Holdings, a publicly traded entity on the NYSE providing K-12 education cloud software, in a deal valued at $5.6 billion. The deal is anticipated to be finalized in the latter half of 2024.