The possible sale of Advent Software Inc. has advisers on alert for indications of who — if anyone — will put in a winning bid for the firm, a longtime leader in portfolio accounting tools for advisers.
Advent officials have refused to comment on reports that began circulating last Tuesday that it had hired Frank Quattrone's investment bank, Qatalyst Partners, to help the software company look for buyers.
Analysts who follow Advent said it's difficult to predict the impact of a sale on Advent's customers until a buyer emerges.
“It depends on who is buying it and what their intentions are,” said Chris Donat, an analyst with Sandler O'Neill + Partners LP. “But it probably wouldn't change much.”
Private-equity firms are said to be showing the most interest in the company, though there's a large price gap between what company officials expect to get for it and potential buyers' offers, according to a Reuters report.
That gap could forestall any deal because the company doesn't have to sell.
Pete Heckmann, an analyst with Avondale Partners LLC, said Advent's valuation is among the highest in its peer group and it could be challenging to find a buyer that sees enough value in the firm to pay a hefty premium. Private-equity firms typically seek to buy businesses at a discount and build them into more profitable operations that they can then sell to benefit their own shareholders.
Advent (ADVS) shares rose nearly 12% from about $26.50 to almost $30 a share last Tuesday after the sale rumors began to fly. That brought the company's market capitalization to nearly $1.5 billion. Shares closed out the week at $28.85.
Officials at Advent competitor Orion Advisor Services LLC were quick to suggest that an ownership change could lead the firm to change its focus or even move to retire older technologies.
“I think it creates some questions from advisers who use Advent,” said Jon Reiners, Orion's vice president of institutional business development.
He pointed to Advent's own purchase of TechFi Corp. in 2002. Three years later, Advent discontinued development and support of the application.
However, Mr. Reiners also said that if Advent became a private company, it would not have to concern itself about shareholder interests and could focus solely on customers. Orion is a private company.
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