A consortium of private equity firms, spearheaded by Permira and Warburg Pincus, has reached an agreement to acquire Clearwater Analytics Holdings Inc. This significant transaction values the investment and accounting software provider at $8.4 billion, a figure that includes existing debt. Under the terms of the deal, Clearwater investors are set to receive $24.55 per share, equating to an equity value of approximately $7 billion. This acquisition price offers a premium of roughly 10% above the stock's most recent closing price, and notably, a 47% premium compared to its valuation on November 10, prior to initial reports of the buyout discussions.

Further reinforcing the buying group, Singaporean state investment company Temasek Holdings Pte is participating, with critical backing from Francisco Partners also confirmed. The acquisition agreement incorporates a 'go-shop' provision, allowing Clearwater to entertain alternative offers until January 23. The entire deal is projected to be finalized within the first half of 2026. Permira and Warburg Pincus have a notable history with Clearwater, having played a role in taking the company public in 2021. Despite the impending acquisition, Clearwater's shares have seen a decline of about 19% this year, closing at $22.25 on the preceding Friday.

Clearwater Analytics, established in 2004 and headquartered in Boise, Idaho, specializes in providing its software solutions to entities within the financial services sector and other industries. The company demonstrated robust financial performance in November, reporting a substantial 77% year-over-year surge in third-quarter revenue, reaching $205 million. Additionally, adjusted earnings before interest, taxes, depreciation, and amortization (EBITDA) saw an impressive 84% jump, approximating $71 million. In April, Clearwater successfully completed its acquisition of Enfusion Inc., a software-as-a-service provider catering to asset managers and hedge funds, in a deal valued at around $1.5 billion.

Activist investor Starboard Value previously acquired a stake of nearly 5% in Clearwater, advocating for the company to conduct a comprehensive sales process should it receive expressions of interest from potential buyers. Permira and Warburg Pincus initially invested in Clearwater in 2020. They were among the private equity supporters when Clearwater launched its initial public offering in 2021, which raised $621 million, including over-allotment shares. In 2023, both firms put all their shares in Clearwater up for sale. However, data compiled by Bloomberg indicates that Warburg Pincus still retained a 0.3% stake in the company as of September 30.

Both Permira and Warburg Pincus have been highly active in the M&A landscape in recent months. In November, Permira outbid Warburg Pincus to acquire JTC Plc, a London-listed provider of fund solutions and corporate services, for £2.3 billion ($3.1 billion). Earlier in December, Permira announced the sale of the online boats marketplace, Boats Group, to General Atlantic and CPP Investments. Concurrently, Warburg Pincus, in November, spearheaded a group that acquired the financial services company ECN Capital Corp. for approximately C$1.9 billion ($1.4 billion), including debt, showcasing their continued strategic involvement in various sectors.