By Shasha Dai
Financial services-focused private-equity firm Stone Point
Capital acquired Black Mountain Systems, a provider of software to
the asset management industry, on Tuesday.
The all-equity transaction values Black Mountain at between $100
million and $150 million, said a person with direct knowledge of
the matter.
San Diego, Calif.-based Black Mountain was formed in 2007 by
loan market professionals to serve such needs as data aggregation
and order tracking by banks and asset managers. Over the years, the
company added research, compliance, fund valuation, performance
benchmarking and other offerings to its software.
"We joked that our biggest competitor is Microsoft," said Andy
Horwitz, co-chief executive of Black Mountain. "People who use
Microsoft Office software--Excel, Word, etc.--that's what we are
replacing. Managing hundreds of millions or billions of dollars on
spreadsheets is a thing of the past."
By early 2008, the company had raised a total of $3 million from
primarily individual investors through two funding rounds.
"We did it on a shoestring budget," said Mr. Horwitz.
Today, 57 clients manage almost $1 trillion dollars of
investments on Black Mountain's software platform. The company
counts among its clients such private-equity firms as Apollo
Management, Ares Management, Babson Capital Management, Blackstone
Group's GSO Capital Partners, Carlyle Group, Kohlberg Kravis
Roberts & Co., and Sankaty Advisors, according to its
website.
Feeling the timing was right for the company's management and
other investors to get some liquidity, Black Mountain retained
SunTrust Robinson Humphrey to handle a sale process.
Mr. Horwitz said his management team hit it off with Stone Point
principals, who began introducing Black Mountain to potential
business partners while the parties met during the auction.
"We witnessed the power of their networks," said Mr.
Horwitz.
Stone Point, of Greenwich, Conn., focuses on investments in
banks, insurance companies, asset managers and other financial
services companies. The firm is currently investing out of Trident
VI LP, a $4.5 billion fund closed in 2014.
Write to Shasha Dai at shasha.dai@wsj.com. Follow her on
Twitter: @ShashaDai1.
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