U.S. Dollar banknotes are seen in this illustration taken July 17, 2022. REUTERS/Dado Ruvic/Illustration
(Reuters) -U.S. financial software provider MeridianLink said on Monday it would be acquired by investment firm Centerbridge Partners in a $2 billion deal, taking it private roughly four years after its New York debut.
Optimism around potential rate cuts and easing economic uncertainty amid progress on trade deals have laid the groundwork for a pickup in private-equity buyouts. Dealmaking appetite for software businesses has also remained robust this year.
MeridianLink shareholders will receive $20 apiece in cash for each share held, implying a 26% premium to the stock's last close. Shares of the Irvine, California-based company, which powers digital lending and account opening for financial institutions, jumped 24% in afternoon trading.
"Industry consolidation has been a key theme in fintech and we view the multiple as reasonable," said William Blair analyst Cristopher Kennedy.
"We have long held the belief that MerdianLink would represent an attractive asset as the company generates strong EBITDA margins at around 40%."
The deal also highlights the growing trend of money managers seeking strategic control of technology companies driving digital transformation in financial services.
Centerbridge is also not new to the fintech space, having acquired bank tech firm CSI in a $1.6 billion deal in 2022.
"As the pace of change across the finance and tech sectors continues to accelerate, MeridianLink is uniquely positioned to help financial institutions enhance their digital lending and credit reporting capabilities," said Centerbridge's Jared Hendricks and Ben Jaffe.
Founded in 1998, MeridianLink caters to nearly 2,000 community financial institutions and reporting agencies. Its revenue rose 8% to $84.6 million during the three months ended June 30, while net loss narrowed to $3 million.
Centerview Partners and J.P. Morgan are advisers to MeridianLink on the deal, which is expected to close in the second half of 2025. Goldman Sachs is advising Centerbridge.
(Reporting by Arasu Kannagi Basil in Bengaluru; Editing by Shilpi Majumdar)
