Today, the financial industry software company announced it would sell to to CVC Capital Partners. Bank of New York Mellon Corp. is keeping a minority stake, the statement said. ConvergEx’s management team, led by Chairman and CEO Joseph Velli, are also staying on as substantial shareholders and will continue to manage the company, a separate statement from GTCR said. UPDATE: The sale was reportedly valued at $1.9 billion but is actually closer to $2 billion, a source says.
The deal is expected to close in the early autumn.
“We are truly appreciative of the many fine efforts by Joseph Velli and his management team as they have built ConvergEx into a leading technology company,” said Collin Roche, a GTCR principal, in a statement.
In 2006, the assets of BNY Mellon and Eze Castle software were combined to form ConvergEx. GTCR invested $150 million in ConvergEx over time, a different source says.
BNY Mellon and GTCR each currently own 33.2% in ConvergEx. Management and directors hold the remainder of the company, according to SEC filings. With the sale to CVC, BONY, GTCR and other investors are expected to make 3x their money, the second source estimates.
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. Once the sale to CVC closes, ConvergEx will pulled the offering, the second source says.
Goldman Sachs, JPMorgan, Citi and Barclays advised on the auction, according to the statement. JPMorgan was lead bookrunner on the IPO (Goldman is also an underwriter on the IPO), sources have told peHUB.
New York-based ConvergEx 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 told peHUB. The Blackstone Group was also interested, the source said. At $1.9 billion, ConvergEx is valued at 12x, north of what it was seeking, sources have said.
Bank of America Merrill Lynch, Deutsche Bank and Morgan Stanley provided financial advice to CVC.
ConvergEx declined comment.