Stone Point Buys Software Company Black Mountain

By Shasha Dai 

Financial services-focused private-equity firm Stone Point Capital acquired Black Mountain Systems, a provider of software to the asset management industry, on Tuesday.

The all-equity transaction values Black Mountain at between $100 million and $150 million, said a person with direct knowledge of the matter.

San Diego, Calif.-based Black Mountain was formed in 2007 by loan market professionals to serve such needs as data aggregation and order tracking by banks and asset managers. Over the years, the company added research, compliance, fund valuation, performance benchmarking and other offerings to its software.

"We joked that our biggest competitor is Microsoft," said Andy Horwitz, co-chief executive of Black Mountain. "People who use Microsoft Office software--Excel, Word, etc.--that's what we are replacing. Managing hundreds of millions or billions of dollars on spreadsheets is a thing of the past."

By early 2008, the company had raised a total of $3 million from primarily individual investors through two funding rounds.

"We did it on a shoestring budget," said Mr. Horwitz.

Today, 57 clients manage almost $1 trillion dollars of investments on Black Mountain's software platform. The company counts among its clients such private-equity firms as Apollo Management, Ares Management, Babson Capital Management, Blackstone Group's GSO Capital Partners, Carlyle Group, Kohlberg Kravis Roberts & Co., and Sankaty Advisors, according to its website.

Feeling the timing was right for the company's management and other investors to get some liquidity, Black Mountain retained SunTrust Robinson Humphrey to handle a sale process.

Mr. Horwitz said his management team hit it off with Stone Point principals, who began introducing Black Mountain to potential business partners while the parties met during the auction.

"We witnessed the power of their networks," said Mr. Horwitz.

Stone Point, of Greenwich, Conn., focuses on investments in banks, insurance companies, asset managers and other financial services companies. The firm is currently investing out of Trident VI LP, a $4.5 billion fund closed in 2014.

Write to Shasha Dai at [e-mail]. Follow her on Twitter: @ShashaDai1.

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