BlackRock to buy eFront in $1.49bn deal

Bridgepoint has generated a 4.8x return from the sale of its stake in eFront, Unquote understands. 

The business was being marketed based on a $75m 2019 EBITDA figure, according to reports by Unquote sister publication Mergermarket.

The news service also reported in early March that London-based IHS Markit was the front-runner in the second round of the auction process, which saw private equity firms Nordic Capital, Permira, Vista Capital and MSCI bid for the asset.

The acquirer is currently planning to combine eFront with Aladdin, BlackRock's investment operating platform used by around 225 institutions around the world, creating an investment and risk management technology group.

eFront will extend Aladdin's end-to-end processing services offering in alternative asset classes, enabling clients to get an enterprise view of their portfolio.

The eFront transaction will be funded with a combination of existing corporate liquidity and debt. While minimally dilutive to earnings per share, the transaction will not be dilutive on a cash basis.

Previous funding
Francisco Partners acquired a majority stake and voting rights in eFront with the aim to take it private in 2011. Among selling shareholders were funds managed by CDC Innovation, Odyssée Venture and OTC Asset Management, as well as corporate stakeholders IBIM 2 and RRA Vendôme. CDC Innovation owned 26.8% of all eFront shares.

The transaction saw Francisco Partners buy a 74.19% stake in the company. The offer valued eFront at approximately €68m, double its market cap at the time of €34m.

Subsequently, Bridgepoint acquired eFront in a €300m deal in 2015 via its Bridgepoint Europe IV fund, which closed on €4.8bn in 2008. Babson Capital, ING, HSBC and Bank of Ireland arranged a debt package for the transaction. 

Under Bridgepoint's ownership, there has been significant investment in R&D, sales and marketing, leading to an expanded product offering. The business model transitioned from a one-off licence model to a subscription-based model. There has also been investment in a new management structure and workforce, as the company's headcount increased by 20%. 

Company
Headquartered in Paris, eFront makes software that manages the alternatives investment lifecycle. Some of its services include due diligence, portfolio planning and performance, and risk analysis, across a range of alternative asset classes.

Founded in 1999, eFront employs 700 people and services clients worldwide from offices in Asia, Europe, the Middle East and North America. The company serves around 700 clients including Ardian, CVC Capital Partners, Natixis, Cathay Capital and Forbion.

In 2018, the business launched eFront Insight, a data & analytics service aimed at digitising data exchanges between GPs and LPs, and providing a depth of data and actionable analytics.

People
BlackRock – Laurence Fink (chairman, CEO).
eFront – Tarek Chouman (CEO).
Bridgepoint – Xavier Robert (partner).

Advisers
Vendor – Morgan Stanley (corporate finance); Credit Suisse (corporate finance).

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