Bridgepoint to reap 4.8x with $1.5 bln eFront sale

Bridgepoint stands to make 4.8x its money with the sale of eFront, a source said.

BlackRock said March 22 that it was buying eFront for $1.3 billion cash. Including debt, the transaction is valued at about $1.5 billion, two people said.

BlackRock, New York, is the world’s biggest asset manager. It plans to merge eFront with Aladdin, its investment-operating platform that’s used by more than 225 institutions. BlackRock said it is welcoming eFront’s more than 700 employees.

Founded in 1999, eFront provides software for the alternative-investments industry, specifically PE firms and limited partners. The Paris company has 850 clients spread across 48 countries.

The transaction represents a big win for Bridgepoint, which acquired eFront in January 2015 for about 300 million euros ($355.1 million), Buyouts reported. The seller at that time was Francisco Partners, which bought the company in 2011 for 68 million euros, Buyouts said.

Bridgepoint, a U.K. private equity firm, invests in sectors including business services, consumer, financial services, healthcare, manufacturing and industrials, as well as media and technology. The firm seeks to buy businesses valued between 200 million and 1 billion euros. Bridgepoint’s sixth European fund closed on 5.5 billion euros ($6.5 billion) in December 2017, Reuters reported.

Bridgepoint put eFront up for sale earlier this year, hiring Credit Suisse and Morgan Stanley to run the process, Buyouts said. Final offers were due the week of March 18, the story said.

Bidders at the end included ION, which is backed by Carlyle Group, IHS Markit and Vista Equity Partners, sources said.

The U.K. PE firm expects to achieve a return of 4.8x once the sale of eFront is completed, one of the people said.

With eFront, BlackRock’s Aladdin will be able to offer a “whole portfolio” approach to customers. Aladdin, which stands for Asset Liability and Debt and Derivatives Investment Network, enables users to model out different risk scenarios — including the chances of a recession or different geopolitical events —- and their effect on fixed income and public equities.

Now, with eFront, Aladdin clients will be able to model out alternative investments. BlackRock will continue to offer eFront as its own platform, Tarek Chouman, eFront’s CEO, said in a statement.

“Private equity is a growing asset class and so BlackRock is trying to get themselves into the ecosystem,” a second person said.

The deal must still clear some hurdles, including approval by eFront’s employee-works council. BlackRock and eFront shareholders also need to recommend the deal, which is expected to close in several months.

Efront, Carlyle and Vista could not be reached for comment. Executives for IHS Markit declined comment.

Action Item: For more info on Aladdin: www.blackrock.com/aladdin