Vista Equity looking at options for financial software provider Finastra - report

Vista Equity Partners is currently investigating potential strategic options for the financial software company Finastra, which could lead to a sale of the business, as per four sources familiar with the matter. The private equity firm is collaborating with Morgan Stanley's investment bankers to evaluate the process, which is still in its early stages, and could involve a complete sale, divestment, or merger/acquisition with another industry player.

Finastra has already garnered initial interest from other investment firms, including Blackstone, as per one source. However, there is no certainty that the process will culminate in a transaction, and the sources spoke anonymously due to the sensitive nature of the discussions. Vista Equity Partners is seeking to leverage the current investor interest in financial software assets, despite the sector's ongoing challenges in valuations due to concerns over the potential disruption of business models and profitability by artificial intelligence.

Finastra, valued at more than high-single-digit billions according to two sources, has been estimated to reach up to $12 billion by traditional earnings multiples. The company anticipates generating $650 million in earnings before interest, tax, depreciation, and amortization this year. Finastra, a London-based provider of software for banks and financial institutions, facilitates payments, lending, and corporate banking operations.

It was established in 2017 through the merger of Misys and Canada's D+H and serves over 80% of the world's top banks, as stated on its website.

Since Chris Walters was appointed CEO in January 2025, Finastra has undergone significant changes, with units sold to better focus on core competencies in payments and lending software. This includes the sale of Finastra's treasury and capital markets business to Apax Partners, which was subsequently renamed Teciem, and the agreement to sell its universal banking business to Pollen Street Capital.