Enfusion ENFN, a U.S. provider of software for wealth managers, is in talks with investment banks to explore options that could include a potential sale, according to people familiar with the matter.
The Chicago-based company, which has a market value of $1.1 billion, decided to interview investment banks in recent weeks after receiving interest from potential suitors, including private equity firms, said one of the sources, who requested anonymity because the matter is confidential.
Enfusion has not yet begun a sale process and it is possible the company will choose to remain independent, the sources added. Enfusion did not immediately respond to requests for comment.
The company’s shares jumped as much as 19% on the news, before trading was briefly halted on Friday.
This isn’t the first time Enfusion has been in talks to explore a deal. Reuters reported last year (link) that Enfusion had received interest from several potential buyers, including Francisco Partners, Vista Equity Partners and Irenic Capital Management.
Enfusion, whose client base is mostly hedge funds, provides cloud-based portfolio and risk management systems to investment funds. The company is trying to win more business from larger funds and companies with complex operations while struggling to capture a larger share of revenue from existing clients.
Enfusion shares, which have been trading in New York since their initial public offering in 2021 and have lost more than 50% of their value since then, were down about 12% year to date through Thursday’s close, trailing the S&P 500 Application Software Index, which was little changed as customers worried about cutting costs.
In the last quarter, the company recorded a 16% growth in revenue compared to the previous year, reaching 49.5 million dollars, below market expectations.
Investment firms FTV Management Company and ICONIQ Capital collectively own approximately 50% of Enfusion.
Earlier this year, Spruce Point Management took a short position in Enfusion, as the investment firm did not believe the company was a high-quality software provider and said its earnings were at “high risk of misstatement.”