ConvergEx Nears Dumping $400 Mln IPO for Sale to CVC

It looks like CVC Capital Partners will be buying ConvergEx.

In May, peHUB reported that ConvergEx had put itself up for sale. At the same time, ConvergEx was pursuing a $400 million IPO in a dual track process. Goldman Sachs is advising on the auction, while J.P. Morgan is lead bookrunner on the IPO (Goldman is also an underwriter on the IPO), sources have told peHUB.

New York-based ConvergEx, a financial industry software company, was seeking bids of 10-11x, sources have said. All the large Boston PE firms looked at the company, including Advent International and Thomas H. Lee Partners, a person says. The Blackstone Group was also interested, the source says.

Final bids for ConvergEx were due about three weeks ago and CVC Capital Partners is the winner, a source says.

BNY Mellon and GTCR Golder Rauner each currently own 33.2% in ConvergEx. Management and directors hold the remainder of the company, according to a May SEC filing.

On Monday, Bloomberg News reported that CVC was near a deal to buy ConvergEx for about $1.9 billion. ConvergEx’s adjusted 2010 EBITDA was $162 million. A $1.9 billion offer would value ConvergEx at 12x, north of what the company was seeking, the source says.

New York-based ConvergEx, a financial industry software company, filed with the SEC for a $400 million IPO. In June, the company filed an updated S-1 that didn’t include how many shares it planned to sell or their price range or on what exchange the company would list. That typically comes in future filing but ConvergEx is expected to pull the IPO.

Why CVC? ConvergEx is looking to expand. A sale to CVC, a UK private equity firm, will give them an international platform and additional capital to pursue acquisitions.

A ConvergEx spokeswoman declined comment.