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Clearwater Analytics Jumps in Debut After $540 Million IPO

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(Bloomberg) -- Clearwater Analytics Holdings Inc., a private-equity-backed financial software maker from Idaho, rose 41% in its trading debut after pricing its initial public offering above a marketed range to raise $540 million.

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Clearwater’s shares closed in New York trading Friday at $25.37, giving the company a market value of $5.9 billion. The company sold 30 million shares Thursday for $18 each after marketing them for $14 to $16.

Boise-based Clearwater’s platform provides investment accounting and reporting, performance measurement, compliance monitoring and risk analytics solutions for asset managers, insurance companies and large corporations, according to its filings with the U.S. Securities and Exchange Commission.

Chief Executive Officer Sandeep Sahai said the company didn’t go public for the cash.

‘Branding Challenge’

“As we went to Europe and Asia we found that, as a small company from Idaho, we had a really difficult time with branding and getting people to believe in us,” Sahai said in an interview. “Once you have a public listing I think it changes that completely. Our ability to attract talent was limited for the same reason. It was harder and harder to do that as a private company from Boise.”

The company is looking to pursue mergers and acquisitions to “get feet on the ground” in Europe and Asia, Sahai said.

He credited the reception by investors to Clearwater’s platform, as well as to the company generating growth and profitability for the past five years.

Clearwater had net income of $8.9 million on revenue of $118 million -- on a pro forma basis -- for the first six months of the year, according to its filings.

Controlling Stakes

The company is backed by private equity firms that will continue to control it. Affiliates of Welsh Carson, Permira and Warburg Pincus will have about 97% of the shareholder voting power in the company, according to the filings.

Concurrent with the IPO, funds and accounts of Wellington Management, Dragoneer Investment Group and Durable Capital Partners indicated interest in buying $150 million of Clearwater’s stock, the company said in the filings.

The offering was led by Goldman Sachs Group Inc., JPMorgan Chase & Co. and Morgan Stanley. The company’s shares are trading on the New York Stock Exchange under the symbol CWAN.

(Updates with closing share price in second paragraph)

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