BlackRock to Buy Risk Platform EFront in $1.3 Billion Wager

(Bloomberg) -- BlackRock Inc., the world’s biggest money manager, agreed to acquire French software provider eFront to expand private equity and real estate analytics for clients.

BlackRock will acquire 100 percent of the equity interest in eFront for $1.3 billion in cash, the company said in a statement Friday.

The deal comes as BlackRock, which mostly oversees assets in indexed products, looks for other avenues to grow its business, including in technology and alternatives. The eFront purchase will add to BlackRock’s risk management technology platform called Aladdin. Customers like pension funds, insurance companies and competing asset managers license Aladdin to analyze how a variety of scenarios would affect their holdings, among other uses.

At the same time BlackRock has been attempting to build up its alternatives business. Last year it purchased Tennenbaum Capital Partners LLC, a Los Angeles-based private credit manager, and announced plans to raise a new fund to buy and hold stakes in companies.

“Technology and illiquid alternatives are two pillars of BlackRock’s growth, and this transaction provides a unique opportunity to accelerate our positioning in both,” Laurence Fink, chairman of BlackRock, said in the statement. “We’re particularly excited about eFront’s global footprint, including its headquarters in Paris, which is a key market on the continent for BlackRock.”

Bridgepoint acquired eFront for 300 million euros in 2015, and the company has broadened its offering since then, according to its website. EFront’s software helps private equity firms, real estate investors and other financial customers analyze their performance and fundraising, monitor and collect data on their portfolios, meet accounting and regulatory obligations and communicate with investors.

Shares of BlackRock fell 2.1 percent to $421.23 at 10:06 a.m. in New York. Through Thursday, they have gained about 10 percent this year.

Credit Suisse Group AG and Morgan Stanley advised eFront and Bridgepoint.

“While this acquisition is incremental, it does fit into their broader strategy of building out their alternatives business and using technology to support that,” said Gabelli & Co. analyst Macrae Sykes.

Founded in 1999, eFront has made several acquisitions to expands its technology platform, according to its website. It has 700 clients across 48 countries as of last year.

BlackRock, which is based in New York, had been competing with IHS Markit Ltd. and private equity firms to buy eFront, people with knowledge of the matter said earlier. BlackRock’s technology services revenue rose in 2018, driven by demand for the Aladdin platform.

Bloomberg LP, the parent of Bloomberg News, competes with IHS and eFront in providing financial news, analytics and information.

--With assistance from Sarah Syed and Saijel Kishan.

To contact the reporters on this story: Annie Massa in New York at amassa12@bloomberg.net;Aaron Kirchfeld in London at akirchfeld@bloomberg.net

To contact the editors responsible for this story: Margaret Collins at mcollins45@bloomberg.net, ;Dinesh Nair at dnair5@bloomberg.net, Alan Mirabella, Vincent Bielski

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