Carlyle to invest in Abrigo at $1 billion-plus valuation

Abrigo, an Accel-KKR-backed software provider for financial institutions, has secured an investment from private equity firm Carlyle Group Inc.

The Austin, Texas-based company is valued at more than $1 billion after the investment, according to people with knowledge of the matter who asked not to be identified discussing private information.

Terms of the deal weren’t disclosed and Carlyle and Abrigo declined to comment on the valuation. With the transaction, Carlyle becomes an equal partner in the business with Accel-KKR, which has backed it since 2015, said Abrigo Chief Executive Officer Wayne Roberts.

Abrigo’s software provides multiple services to the banking industry including fraud prevention, lending and risk management, compliance and data and analytics. The company has over 2,300 customers and revenue growth of more than 30% year over year, according to a statement.

The company’s products address several pain points in the financial institutions universe while most software companies focus only on one function within the market, Roberts said in an interview.

“We have competitors in each one of them,” he said. “We have no competitor that does all of them.”

The Carlyle investment will allow the company to look at “transformative” and “material” acquisitions, Roberts said.

There are several companies that are considered “high priority” and deals discussions could begin in several months, said Anna Tye, a managing director at Carlyle who has played a key role in the firm’s financial technology investments such as Dealogic Plc.

Carlyle is seeking to raise as much as $27 billion for its latest flagship fund, in what would be the industry’s largest-ever private equity pool, Bloomberg News previously reported.

Growth Strategy

“This management team is a management team that has a track record of successfully integrating M&A and a team that is capable of running a much larger business,” she said.

Abrigo’s organic and inorganic growth will likely focus on its current customer base — small- and midsize financial institutions such as community banks and credit unions across the U.S., Tye said.

“It’s really focused around helping financial institutions generate revenue and operate more efficiently and in compliance with certain regulations,” she said.

Goldman Sachs Group Inc. was lead financial adviser to Carlyle on the deal, while Abrigo was advised by Raymond James, according to the statement.

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