Carlyle lines up bankers for possible sale of British fund network Calastone, sources say

By Amy-Jo Crowley

LONDON (Reuters) - Carlyle has lined up bankers to explore a sale of its British funds network and data business Calastone, which would be the latest deal in a sector that has attracted billions of pounds from investors, four people familiar with the matter said.

The U.S. buyout group is working with Barclays to explore a sale of the London-headquartered business, a marketplace for trading and settling investment funds underpinned by blockchain technology, the people said. It also provides data on fund flows.

The process is in its early stages and Carlyle is expected to proceed with an auction before the summer, two of the people said.

It could fetch more than 20 times its earnings before interest, tax, depreciation and amortisation, or 600 million pounds ($731.52 million), in the event of a sale, based on deals in the wider financial technology and data sector, one of the people added.

The four sources said a deal was not certain and asked not to be identified because the matter is confidential.

Carlyle and Calastone did not immediately respond to a request for comment. A spokesperson for Barclays declined to comment.

Calastone is expected to attract attention from global exchange and market infrastructure groups as well as private equity firms, three of the people said.

A sale would mark the latest in a series of deals for companies that provide specialised financial technology and data to clients including banks, asset managers and investment groups, and that have changed hands at elevated valuation multiples. BlackRock agreed to buy Preqin last year for 2.55 billion pounds.

Calastone's customers span 4,000 fund distribution and fund manager clients in 57 countries, processing 270 billion pounds of investment value each month, the group's website said.

It uses blockchain among other technologies to automate manual tasks including order routing, settlement and transaction reporting for asset and fund managers, which have been hampered by rising costs and inefficiency in the past, according to its website.

Carlyle, which has $447 billion under management, bought Calastone from venture capital investor Octopus Ventures and Accel in 2020 for an undisclosed sum. Management, led by CEO Julien Hammerson, hold a minority stake in the business.

Revenues at Calastone were 68.3 million pounds in 2023, up from 60.3 million pounds a year earlier, according to Companies House filings.

($1 = 0.8202 pounds)

(Reporting by Amy-Jo Crowley. Editing by Anousha Sakoui and Jane Merriman)