BlackRock has made a binding offer and entered into an agreement to acquire 100% of the equity interests in eFront, an end-to-end alternative investment management software and solutions provider, from private equity firm Bridgepoint and eFront employees, for $1.3bn in cash.
The combination of eFront with Aladdin, BlackRock's investment operating platform used by more than 225 institutions around the world, will set a new standard in investment and risk management technology.
eFront, which serves more than 700 clients in 48 countries, is a comprehensive technology solution for managing the alternatives investment lifecycle, from due diligence and portfolio planning to performance and risk analysis, across a range of alternative asset classes.
"Technology and illiquid alternatives are two pillars of BlackRock's growth, and this transaction provides a unique opportunity to accelerate our positioning in both," said Laurence D. Fink, chairman and CEO of BlackRock.
"We're particularly excited about eFront's global footprint, including its headquarters in Paris, which is a key market on the continent for BlackRock. As a global asset manager, we are increasingly focused on understanding the unique needs of clients in each community where we operate. eFront immediately deepens our presence and technology capabilities in France, Europe and across the globe," he added.
eFront will extend Aladdin's end-to-end processing solutions offering in alternative asset classes, enabling clients to get an enterprise view of their portfolio.
"There are $9trn in alternative assets under management in the industry today and clients are incorporating them into their investment strategies at a record pace," said Goldstein. "This has created an unprecedented need for risk and investment management capabilities spanning both public and private asset classes."
"Offering eFront's leading capabilities in alternatives to the Aladdin Community through BlackRock Solutions will allow our clients to access a ‘whole portfolio' approach that only Aladdin will provide. We are excited to welcome eFront's 700 employees to BlackRock as we continue to offer eFront as its own platform and enrich its value proposition with Aladdin analytics."
Tarek Chouman, chief executive officer of eFront said: "BlackRock's dynamic platform and global reach will allow us to help even more clients with their alternative asset needs and greatly enhance the value proposition we offer our clients today."
Following completion of the notification and consultation process with eFront's employee-works council, as required by law, BlackRock and eFront's shareholders are expected to enter into a definitive securities sale agreement contemplated by agreement. Closing of the transaction would be subject to entry into the definitive securities sale agreement and satisfaction of the conditions set forth therein.
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.
Separate from the eFront acquisition, on 20 March 2019, BlackRock entered into an agreement to repurchase approximately 3.1 million of its shares at a per share price of $412.84 in a private transaction under its existing repurchase program. The share repurchase transaction is expected to close on March 25, subject to customary closing conditions. As of 25 March, BlackRock will repurchase an aggregate of approximately $1.6bn of its shares in 2019 and will have completed its targeted level of share repurchases for the year, but will remain opportunistic should relative valuation opportunities arise.