Private equity investor Bridgepoint Capital will pay $338.7 million (300 million) for eFront, a software provider for financial services companies, including PE firms.
Known for building customized portals for limited partners and general partners, EFront was founded in 1999 and today boasts offices in Boston, Chicago, Dallas, New York, San Francisco, Tampa, Florida and Paris, where it is based.
The transaction marks an exit for Francisco Partners, which acquired EFront in September 2011. At the time, EFront was valued at $88 million. When details of a Barclays-run sale process came about in October, Francisco Partners had reportedly been asking for a price north of $400 million.
Efront wielded M&A in its own right, growing with add-on acquisitions. In October 2012, EFront bought DMLT, a Tampa, Florida-based provider of investor reporting and portal services for the alternative asset community. In October 2013, eFront picked up AnalytX, an alternative investment software company known for handling back-office services within small and medium-sized companies.
In a recent interview, EFront chief Eric Bernstein credited the company's expansion to the growing middle market, and the relationships between general partners (GPs) at PE firms and the limited partners (LPs) that invest in funds. Efront's sweet spot is in building customized portals for GPs and LPs to conduct business.
"The way most general partners communicate is through capital calls, notices and sending PDF documents. The folks receiving them are accountants and analyst groups who download it and key it into a system. With that process, you're never going to get a portfolio manager to look at it," Bernstein says. "Customized portals are designed to bring GPs and LPs together with a better communication tool."
Among the company's clients are the Carlye Group LP (Nasdaq: CG). Other middle-market firms began approaching EFront as well, opting for customized portals—not only to set themselves apart from other dealmakers—but also to provide an easier method to transfer important documents, in addition to data and records on previous investments.
EFront served 120 new clients last year, representing growth of 30 percent, according to Bernstein. “The growth is mostly in the middle market.”
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