Blackstone (BX) To Buy ESG Software Firm Sphera for $1.4B
The Blackstone Group Inc. BX, via its private equity label, has inked a $1.4 billion deal to acquire Sphera, a pioneer in providing environmental, social and governance (“ESG”) software, data and consulting services. The move comes as the private equity giant seeks to directly impact the transition to a low-carbon economy and provide ESG-focused investment opportunities.
The terms of the deal with Genstar Capital have not been disclosed yet. The buyout of Sphera will thus allow Blackstone to avail its proprietary SaaS software, enabling its customers to nullify ESG risks.
Based in Chicago, IL, Sphera caters to more than 3,000 customers across over 100 countries. Its services facilitate organizations to measure and manage their performance and risk exposure connected to their ESG activities.
Per the senior managing director of Blackstone, Eli Nagler, the company’s thematic investing focus area follows the rising importance of ESG issues for all businesses globally. He further stated, “Sphera has established itself as a market leader in the ESG software and solutions space, and we’re excited to partner with Paul and this best-in-class management team to continue to accelerate their impressive growth trajectory.”
Geoff Miller, director at Genstar Capital, said, “In 2016, Genstar partnered with Paul Marushka to build a leading software platform in ESG and operational risk management. We have been thrilled with the leadership position Paul and his team established after the initial acquisition of Sphera. The company has made significant investments in the business, expanded the company’s geographic and end-market reach, and executed a number of key acquisitions to expand the company’s portfolio of cloud-based applications. With Sphera’s strong management team and a robust sales and marketing organization, the company is poised to continue its growth with the support from Blackstone’s global team."
In the past six months, shares of Blackstone have gained 55.1%, outperforming 24.4% growth recorded by the industry.
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Currently, the company carries a Zacks Rank #2 (Buy).You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Competitive Landscape
Many finance companies have started to come ahead and participate in ESG investing for the past couple of years.
Recently, Affiliated Managers Group AMG announced that it is acquiring majority equity stake in Parnassus Investments, one of the largest sustainable investing fund managers in the United States. Earlier in February, it had announced a deal with Boston Common Asset Management, LLC, an independent, partner-owned global equity manager that focuses on integrated ESG impact investing.
In June 2021, JPMorgan JPM inked a deal to acquire San Francisco-based financial technology start-up, OpenInvest, to leverage its ESG skills with that of 55ip's tax-smart investment strategies, in order to offer personalized solutions to clients “that are values-aligned and tax-efficient.” This apart, the bank’s asset management division — J.P. Morgan Asset Management — had also announced the acquisition of Campbell Global, LLC, a forest management and timberland investing company to integrate sustainability into its business.
Likewise, in November 2020, Moody's MCO acquired a minority stake in MioTech, as part of its efforts to offer innovative ESG and know-your-customer solutions to the financial markets of China. Also, in 2019, the company acquired a majority stake in Vigeo Eiris, a global leader in ESG research, data and assessments.
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