In a landmark transaction, Ropes & Gray-led Bain Capital is set to acquire Envestnet Inc. for $4.5 billion in a take-private deal, as announced on Thursday. The acquisition, guided by Paul Weiss, reflects Bain Capital’s strategic expansion in the financial technology sector.

Bain Capital $4.5B Acquisition of Envestnet : Key Details of the Acquisition

Under the approved agreement by Envestnet's board, shareholders will receive $63.15 in cash per share of common stock. The transaction is slated to close in the fourth quarter of 2024, pending shareholder and regulatory approvals.

Strategic Investments and Partnerships

Significant industry players including BlackRock, Fidelity Investments, Franklin Templeton, and State Street Global Advisors have committed to investing in the deal, securing minority stakes in Envestnet post-transaction. Additionally, Reverence Capital has agreed to participate, reinforcing the financial backing for this acquisition.

"Through its deeply connected ecosystem and innovative technology and data capabilities, Envestnet has built an industry-leading platform that the largest wealth management firms, registered investment advisers, and broker-dealers rely on to power their businesses," stated Phil Loughlin, a partner at Bain Capital.

Bain Capital $4.5B Acquisition of Envestnet : Envestnet’s Market Position

Based in Berwyn, Pennsylvania, Envestnet provides comprehensive wealth management software and products, serving financial advisers and institutions. With oversight of nearly 20 million accounts, the company supports over 109,000 financial advisers and 800 asset managers.

"The board and its advisers conducted a process to maximize value for shareholders," said Jim Fox, Envestnet’s chair and interim CEO. Bill Crager, co-founder of Envestnet, added, "This is a great outcome for Envestnet's clients and employees, and one that maintains its entrepreneurial spirit. Envestnet is exceptionally well positioned to continue to build a gateway to the future of financial advice."

Advisory and Financial Support

Morgan Stanley & Co. served as the exclusive financial adviser to Envestnet. Bain Capital's financial advice was spearheaded by J.P. Morgan Securities. The transaction also received committed debt financing and additional financial advice from RBC Capital Markets, BMO Capital Markets, Barclays, and Goldman, Sachs & Co. Additional debt financing was provided by funds managed by Ares Management, Blue Owl Capital, and Benefit Street Partners.

Bain Capital $4.5B Acquisition of Envestnet : Legal Representation

Ropes & Gray LLP represented Bain Capital with a comprehensive team including private equity partners Will Shields, David Hutchins, and Jessica Cooney; M&A partners Thomas Holden and Thomas Fraser; finance partners Scott Rolnik and Byung Choi; asset management partners Jessica Reece, Brynn Rail, and Greg Davis; litigation and enforcement partners Dan McCaughey, Jonathan Klarfeld, Ama Adams, Nick Berg, and Martin Crisp; executive compensation and employee benefits partners Renata Ferrari and Josh Lichtenstein; data, privacy, and cybersecurity partner Ed McNicholas; tax partner Pamela Glazier; IP transactions partner Erica Han; employment partner Megan Bisk; and business restructuring partner Ryan Dahl.

Paul Weiss Rifkind Wharton & Garrison LLP represented Envestnet, led by corporate partners Robert A. Kindler and Benjamin Goodchild.