Nasdaq to pay 16.5x for Insight PE-backed eVestment

Insight Venture Partners is exiting eVestment, the data company it has backed for more than nine years.

Nasdaq said Sept. 5 that it would buy eVestment for $705 million. The exchange operator said it would fund the deal with cash and debt. The sale is expected to close in the fourth quarter.

Founded in 2000, eVestment provides institutional investment data and analytics. The Atlanta company serves around 2,000 clients, including 92 percent of the top 50 asset managers and 70 percent of the top pension funds, said Nasdaq CEO Adena Friedman on a conference call Tuesday announcing the transaction. Google, BlackRock and CalPERS are eVestment customers.

Friedman has pushed Nasdaq to expand its data business, the Wall Street Journal said. The CEO noted that eVestment has relationships with asset managers to share information on a confidential basis. eVestment is also “growing in the private equity space,” Friedman said on the call. “They’re just starting to penetrate this space.”

“eVestment will become a critical component of Nasdaq’s strategy,” Friedman added.

eVestment’s cash revenue hit $81 million in 2017, up 50 percent from $54 million in 2013, according to slides from the call. 

Jim Minnick, eVestment’s longtime chief executive and co-founder, is staying at the company but Friedman didn’t mention his position. “Jim definitely will be part of the team,” she said.

eVestment went up for sale over the summer; Evercore advised on the process, Buyouts reported in July. Private equity had been expected to win the auction, which saw GTCR, Nasdaq and Morningstar vying for eVestment, Buyouts said on Aug. 9.

At $705 million, Nasdaq is paying 16.5x eVestment’s adjusted cash EBITDA for 2018, executives on the call said. “That’s a massive price,” one banker said.

Insight VP’s investment in eVestment dates to January 2008, PitchBook said. It’s unclear how much Insight provided. The New York firm makes minority and control growth investments in software and internet-focused companies. The sale of eVestment comes as Insight VP is targeting $6 billion for its next fundraising, which will include its 10th fund, Buyouts said in March.

Silicon Valley Bank provided $19 million in debt to eVestment in November 2010. Salmon River Capital, the PE firm from Joshua Lewis, invested $1 million in 2005. Lewis is a former GP of both Warburg Pincus and Forstmann Little.

In August 2015, eVestment completed a $106.5 million dividend recap, which it used to pay a distribution to shareholders, PitchBook said.

Ralph Schlosstein, Jason Sobol, Nathan Graf and Jonathan Knee of Evercore provided financial advice to eVestment.

Executives for Salmon River and Silicon Valley Bank referred calls to eVestment, which could not be reached for comment. Insight and Nasdaq also could not be reached.

Action Item: Contact Jim Minnick, eVestment CEO, at +1 877-769-2388

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