NEW YORK - EQT (ST:EQTAB) Private Equity, part of the EQT X fund, has announced the acquisition of Avetta, a leading provider of supply chain risk management (SCRM) software, from Welsh, Carson, Anderson & Stowe (WCAS). Avetta's platform is recognized for its comprehensive approach to managing various supply chain risks including safety, compliance, and sustainability.
Avetta's cloud-based SaaS platform supports over 500 hiring clients and 130,000 suppliers across more than 130 countries. The company has been pivotal in enabling organizations to navigate the complexities of global supply chains, which are increasingly challenged by the demands of globalization, digitization, and stringent regulatory requirements.
The acquisition by EQT is set to bolster Avetta's growth and innovation trajectory. EQT plans to back Avetta's development of new products, adoption of AI and automation technologies, and further global expansion. This strategic partnership aims to enhance Avetta's offerings to its clients and suppliers, focusing on creating more resilient global supply chains.
Arvindh Kumar, Partner and Co-Head of Technology within EQT's Private Equity Advisory Team, expressed confidence in Avetta's market position and its alignment with EQT's investment focus on technology and ESG (Environmental, Social, and Governance) factors. Arshad Matin, CEO of Avetta, welcomed the partnership with EQT, acknowledging it as a new era of innovation for the company and the SCRM industry.
The transaction is expected to push EQT X's investment level to 35-40 percent, factoring in closed, signed, or announced investments. Completion of the deal is pending customary closing conditions and regulatory approvals, with financial details remaining undisclosed.
Goldman Sachs & Co. LLC and Kirkland & Ellis provided exclusive financial and legal advisory services to Avetta, respectively, while Citi and Ropes & Gray served EQT in the same capacity. The information in this article is based on a press release statement.
InvestingPro Insights
EQT Corporation (NYSE:EQT), with its recent strategic acquisition of Avetta, has shown a clear focus on growth and innovation, particularly in technology sectors that align with ESG factors. This aligns with the company's underlying financial health as reflected in its real-time metrics. With a market capitalization of $16.36 billion and a P/E ratio that stands at 8.17, EQT appears to be valued favorably by the market, especially when considering its profitability over the last twelve months.
The company's Gross Profit Margin for the same period was a robust 53.44%, indicating a strong ability to retain earnings after the cost of goods sold, which is crucial for funding growth initiatives such as the Avetta acquisition. Additionally, EQT's Return on Assets (ROA) was 7.23%, a metric that investors often look to as a measure of how effectively a company is deploying its assets to generate earnings.
Moreover, investment analysts seem optimistic about EQT's future profitability, despite some downward revisions in earnings estimates for the upcoming period. An InvestingPro Tip reveals that analysts predict the company will be profitable this year, which may be a reassuring sign for investors looking at the long-term value creation potential of EQT. For those seeking more in-depth analysis, there are over 10 additional InvestingPro Tips available for EQT, which can be accessed with the added benefit of a 10% discount on a yearly or biyearly Pro and Pro+ subscription using the coupon code PRONEWS24.
As EQT enters a new chapter with Avetta, these financial metrics and analyst insights can provide investors with a clearer picture of the company's current standing and future prospects. The next earnings date is set for April 24, 2024, which will likely provide further insights into how the acquisition is being integrated into EQT's broader strategy.
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