Blackstone to Acquire ESG Software Firm Sphera

Leading investment firm Blackstone (BX) announced that it has entered into a definitive agreement to acquire Sphera from Genstar Capital through its private equity vehicle. The investment values the provider of ESG software, data and consulting services company at approximately $1.4 billion. The financial terms of the deal have been kept under wraps.

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Following the news, shares of the company declined marginally in Tuesday’s trading session. It added to its losses slightly to close at $97.54 in the extended trading session.

The buyout of Sphera will allow Blackstone gain access to the company’s proprietary SaaS software, which helps its customers negate ESG risks. With about 3,000 customers spanning roughly 100 countries, Sphera’s acquisition will give Blackstone a strong foothold in the ESG space.

A Senior Managing Director at Blackstone, Eli Nagler, said, “The increasing importance of environmental, social, governance issues to businesses globally is a key thematic investing focus for Blackstone. Sphera has established itself as a market leader in the ESG software and solutions space, and we’re excited to partner with Paul and this best-in-class management team to continue to accelerate their impressive growth trajectory.” (See Blackstone stock chart on TipRanks)

Last month, Citigroup analyst William Katz reiterated a Hold rating on the stock. The analyst, however, raised the price target from $75.50 to $91 (6.7% downside potential from current levels).

Consensus among analysts is a Strong Buy based on 9 Buys and 3 Holds. The average Blackstone price target of $91.91 implies downside potential of 5.8% from current levels.

Shares of the company have gained 82% over the past year.