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Report: Envestnet Explores Sale; Stock Price Spikes

Envestnet has received interest from private equity firms, including Bain Capital, according to a press report. Shares ended the day up 9% on the news.

Envestnet, the publicly traded wealthtech company, is exploring a sale, according to a Reuters report citing confidential sources.

The company has received interest from private equity firms, including Bain Capital, sources told Reuters. Envestnet has hired Morgan Stanley to serve as its investment bank in the process and help navigate interest from potential buyers.

A spokesman for Envestnet declined to comment.

Shares of Envestnet stock were up over 9% as of 4 p.m. eastern time, but shares went as high as $64.87 this afternoon on the sale news, up nearly 16% from the start of the trading day. The company was valued at $3.4 billion at market close Tuesday.

The company has been subject to takeover speculation since CEO Judson Bergman and his wife, Mary Miller, died in a San Francisco car accident in 2019. 

Envestnet explored its options for a sale about two years ago after receiving takeover interest, Bloomberg reported at the time. The publication said the company had been approached by at least one private equity firm interested in acquiring it.

The company has seen some recent organizational changes at the top. In January, CEO Bill Crager, who took over when Bergman passed away, announced he was stepping down from his role. He has since transitioned to the role of senior advisor, focusing on client and partner relationships and key strategic initiatives. Board chairman James L. Fox is now serving as interim CEO while a search for a successor is underway. Executive Vice President Tom Sipp continues to lead Envestnet's business lines.

Under Crager, Envestnet has grown to oversee $5.4 trillion in client assets on its platform and more than 107,000 advisors served via its business units focused on trading, risk analysis, direct indexing, tax management, data aggregation and enrichment, client prospecting and estate planning.

Since Crager took over following Bergman's death in 2019, the company has weathered a number of obstacles, including disputes with activist shareholder Impactive Capital, which acquired a 7.5% stake in the company and two board seats in 2022, and layoffs toward the end of 2023. It recently announced it was pushing out its planned foray into the custodian business until later this year.

TAGS: Industry
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