Permira and Warburg Pincus to Acquire Clearwater Analytics for $8.4 Billion
A group of private equity firms, spearheaded by Permira and Warburg Pincus, has revealed their intention to purchase Clearwater Analytics, an investment and accounting software company, for an estimated $8.4 billion, a figure that includes existing debt. This strategic move highlights the ongoing consolidation within the financial technology sector, as major players seek to expand their portfolios and capitalize on market opportunities.
The acquisition proposal values Clearwater Analytics at $24.55 per share in cash, marking a substantial 47% premium above its closing stock price of $16.69 on November 10, the day prior to initial reports surfacing about a potential sale. This generous offer underscores the acquiring firms' confidence in Clearwater's market position and future growth prospects. Other notable investors participating in this deal include Francisco Partners and Temasek, further solidifying the financial backing for this significant transaction.
Under the terms of the agreement, Clearwater Analytics will have a 'go-shop' provision until January 23, 2026. This clause allows the company to actively solicit and evaluate alternative acquisition offers from other interested parties, with a potential extension of an additional 10 days for specific bidders. This mechanism ensures that Clearwater's shareholders receive the most favorable outcome possible. The entire transaction is projected to be finalized within the first six months of 2026.
Permira and Warburg Pincus have a history with Clearwater, having previously supported the company in 2020 and its subsequent $621 million initial public offering in 2021. Founded in 2004, Clearwater Analytics recently showcased robust financial performance in its third quarter, reporting a 77% increase in revenue to $205.1 million and an 84% surge in adjusted EBITDA, reaching approximately $71 million. This strong growth trajectory likely played a crucial role in attracting the current acquisition bid.
The announced acquisition of Clearwater Analytics by a consortium led by Permira and Warburg Pincus signifies a major event in the financial technology landscape, promising a substantial premium for shareholders and aiming to further enhance the company's capabilities and market reach.