BlackRock Enters Exclusive Agreement to Buy French Software Provider eFront -- Update
March 22 2019 - 9:41AM
Dow Jones News
By Dawn Lim, Ben Dummett and William Louch
BlackRock Inc. said it has entered into an exclusive agreement
to buy French software firm eFront, a move by the world's largest
money manager to become a bigger provider of the technology used by
Wall Street.
The offer from the New York firm is to pay $1.3 billion in cash
for 100% equity in eFront. The software company provides reporting
on private equity and alternatives for financial institutions,
tracking everything from fees to deals to fundraising.
BlackRock said for the deal to be completed eFront's
employee-works council has to be notified and shareholders from
both companies have to enter into a definitive securities sale
agreement. The French firm is backed by European private-equity
firm Bridgepoint, which bought the software company in 2015 for
about EUR300 million, or about $341 million.
For BlackRock, the bid is part of a larger effort to diversify
away from the stock-and-bond offerings that it is best known for as
the asset-management industry comes under increasing price
pressure. Chief Executive Laurence Fink has said he wants more of
the company's revenue tied to technology.
At present, BlackRock's best known tech offering is a suite of
tools that financial institutions use to measure risk called
Aladdin. The firm is hoping that clients can use eFront's tools
alongside Aladdin to have a more robust set of options to assess
their portfolios, a person familiar with the matter said.
Investor appetite for higher-returning alternatives to stocks
and bonds has exploded in recent years, creating more demand for
tools to monitor complex investments. Many pensions and endowments
have struggled to monitor fees and piece together information about
their fund investments in private equity even as they continue to
pour money into that asset class.
The deal also gives BlackRock, which has about $6 trillion in
assets under management, more tools to help it invest in
nontraditional investments, a priority for the firm. The firm has
about $112 billion in private equity, infrastructure and other
strategies known as alternatives.
The transaction could also give BlackRock a bigger footprint in
France as it looks to expand in parts of the world where it doesn't
dominate.
Write to Dawn Lim at dawn.lim@wsj.com, Ben Dummett at
ben.dummett@wsj.com and William Louch at william.louch@wsj.com
(END) Dow Jones Newswires
March 22, 2019 10:26 ET (14:26 GMT)
Copyright (c) 2019 Dow Jones & Company, Inc.
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