Permira and Warburg to buy investment software maker, Morgan Stanley pick Clearwater

A consortium of private equity firms led by Permira and Warburg Pincus has agreed to acquire investment software maker Clearwater Analytics for about $8.4 billion, including debt, according to an official press release from Permira.

On the news, Clearwater shares climbed more than 8% at the open on Monday, December 22.

The buyer group has offered Clearwater shareholders, according to Clearwater's statement, $24.55 per share in cash, valuing the company at a 47% premium to its November 10 closing price of $16.69 per share (the last trading day before reports of a potential sale emerged).

The agreement includes a go-shop period running through January 23, 2026, allowing Clearwater to solicit competing bids. The transaction is expected to close in the first half of 2026, subject to regulatory approvals, Reuters reports.

Minority investors in the deal include Francisco Partners and Singapore's sovereign wealth fund Temasek, writes Reuters.

Based in Boise, Idaho, Clearwater develops cloud-based software used by institutional investors to manage portfolios. Its platform consolidates investment accounting, analytics, and reporting, and supports the integration of AI-driven tools.

A source familiar with the deal was quoted by Reuters as saying the opportunity to deepen Clearwater's AI capabilities and expand the value of its platform was a key reason the take-private transaction was attractive.

Permira and Warburg Pincus were majority owners of Clearwater prior to its 2021 IPO and pared back their holdings after the listing, including through sales of certain share classes, Reuters writes. Clearwater went public at a valuation of $5.5 billion and had a market capitalization of about $6.5 billion as of December 21, according to LSEG data.

In April, Morgan Stanley flagged Clearwater as an attractive small-cap stock, with an "overweight" rating, pointing to its positive return on equity and positive share price performance in what had been a period of market volatility for 12 months.