AQR Capital Management, an affiliate of AQR, is reportedly involved in an appraisal arbitrage play concerning the acquisition of Clearwater Analytics. This strategy involves buying shares of a company after a deal announcement and then legally challenging the acquisition terms in court, aiming for a judge to appraise the deal at a higher value. If successful, the investor profits from the difference between the initial offer and the court-determined value.
The take-private acquisition of Clearwater Analytics, an investment and accounting software maker, was led by Permira and Warburg Pincus, valuing the company at approximately $8.4 billion, including debt. Clearwater investors received $24.55 per share, representing an equity value of about $7 billion. This price also marked a 47% premium over the stock's undisturbed share price on November 10, 2025, before media reports of a potential transaction.
The deal officially closed on June 25, 2026, with the investor group also including Francisco Partners and Temasek. The acquisition was supported by $3.5 billion in private debt financing led by Goldman Sachs Alternatives, with participation from Ares Management Corp., Blue Owl Capital Inc., Antares Capital, and Apollo Global Management Inc. The debt was offered at a 4.5-percentage-point premium to the US benchmark. The involvement of firms like AQR in appraisal arbitrage suggests they believe the $24.55 per share offered by the acquiring group undervalued Clearwater Analytics.
