BOISE, Idaho and SANTA MONICA, Calif. – Clearwater Analytics (NYSE: CWAN), a prominent SaaS-based investment solutions provider, has announced the acquisition of risk and performance analytics tools from Wilshire Advisors LLC, a global financial services firm. The acquired assets—Wilshire AxiomSM, Wilshire AtlasSM, Wilshire Abacus, and Wilshire iQComposite—will be integrated into Clearwater’s platform, creating the co-branded Clearwater Wilshire Analytics.
The deal, slated to close in the second quarter of 2024, is expected to enhance Clearwater’s offerings for investment managers and institutional asset owners, including public pension plans, insurers, and foundations. This move aims to provide clients with advanced tools for performance and risk attribution, portfolio construction, and investment opportunity identification.
Wilshire’s analytics, known for their reliability and adoption worldwide, will be complemented by Clearwater’s investment in a modern front-end, expanded asset class coverage, and enhanced capabilities. Following the acquisition, Wilshire will maintain access to the analytics software for its client support.
Clearwater’s CEO, Sandeep Sahai, emphasized the strategic importance of the acquisition, noting its alignment with clients’ long-term needs across the investment lifecycle. Andy Stewart, CEO of Wilshire, expressed confidence in Clearwater as the ideal entity to further the growth and investment in these analytic tools.
The transaction is valued at approximately $40 million, with the potential to add around $7 million in annualized revenue to Clearwater. The partnership is designed to improve investment outcomes for clients and expand market reach.
Wilshire, advising on over $1.3 trillion in assets and managing more than $100 billion as of December 31, 2023, will continue to focus on its core business lines, while Clearwater, automating the investment lifecycle for over $7.3 trillion in assets, will enhance its comprehensive risk and performance solutions.
The information is based on a press release statement.
InvestingPro Insights
As Clearwater Analytics (NYSE: CWAN) moves forward with its strategic acquisition of Wilshire Advisors LLC’s analytics tools, the company’s financial health and market valuation are key factors for investors to consider. The latest data from InvestingPro provides a snapshot of Clearwater’s current financial position.
With a market capitalization of $4.33 billion, Clearwater Analytics is showing signs of growth, as indicated by a revenue increase of 21.34% for the last twelve months as of Q4 2023. This growth trajectory is further supported by the company’s robust gross profit margin of 70.9%, showcasing its ability to retain a significant portion of its revenue as profit after accounting for the cost of goods sold.
InvestingPro Tips highlight that Clearwater holds more cash than debt on its balance sheet and liquid assets exceed short-term obligations, which may provide the company with a cushion to navigate through market uncertainties and invest in opportunities like the recent acquisition. Additionally, analysts predict that the company will be profitable this year, aligning with the CEO’s emphasis on meeting clients’ long-term needs.
However, it’s important to note that Clearwater is currently trading at high valuation multiples, with a Price / Book ratio of 12.21 as of the last twelve months ending Q4 2023. This suggests that investors are willing to pay a premium for the company’s shares, which could be due to expectations of future growth or the strategic value of acquisitions such as the one with Wilshire.
For investors looking for a deeper analysis, there are additional InvestingPro Tips available, providing insights into Clearwater’s financial performance and market potential. To explore these tips and gain a comprehensive understanding of the company’s investment profile, visit https://www.investing.com/pro/CWAN and remember to use the coupon code PRONEWS24 to get an additional 10% off a yearly or biyearly Pro and Pro+ subscription.
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