Unlocking the Potential of Financial Technology
The financial technology sector has been abuzz with activity, attracting billions of pounds in investments. Now, Carlyle, a US-based buyout group, is exploring the sale of its British funds network and data business, Calastone. This move could be the latest in a series of deals that have reshaped the industry.
A Marketplace for Trading and Settling Investment Funds
Calastone, headquartered in London, operates a marketplace for trading and settling investment funds, leveraging blockchain technology to automate manual tasks. The company also provides valuable data on fund flows, making it an attractive target for potential buyers.
Exploring a Sale
Carlyle has enlisted the services of Barclays to explore a sale of Calastone, which could fetch more than 20 times its earnings before interest, tax, depreciation, and amortization. This could translate to a sale price of around 600 million pounds ($731.52 million), based on deals in the wider financial technology and data sector.
Auction Process to Commence
The sale process is still in its early stages, with an auction expected to take place before the summer. While a deal is not certain, Calastone is likely to attract attention from global exchange and market infrastructure groups, as well as private equity firms.
A Growing Trend in Financial Technology
The potential sale of Calastone marks the latest in a series of deals for companies that provide specialized financial technology and data to clients. Last year, BlackRock agreed to buy Preqin for 2.55 billion pounds, highlighting the growing trend of consolidation in the industry.
Calastone’s Impressive Reach
Calastone’s customers span 4,000 fund distribution and fund manager clients in 57 countries, processing a staggering 270 billion pounds of investment value each month. The company’s use of blockchain technology has helped automate manual tasks, reducing costs and inefficiencies for asset and fund managers.
Carlyle’s Investment
Carlyle, which has $447 billion under management, acquired Calastone from venture capital investor Octopus Ventures and Accel in 2020 for an undisclosed sum. Management, led by CEO Julien Hammerson, hold a minority stake in the business.
Financial Performance
Revenues at Calastone have been growing steadily, reaching 68.3 million pounds in 2023, up from 60.3 million pounds a year earlier, according to Companies House filings. As the financial technology sector continues to evolve, Calastone’s sale could be a significant milestone in the industry’s growth.
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