Glazer Capital LLC, a prominent event-driven hedge fund, has fully exited its position in Clearwater Analytics Holdings Inc (NYSE:CWAN), according to a Schedule 13G filing with the Securities and Exchange Commission on July 1. The filing shows the fund now holds zero shares and a 0% stake in the company, marking the end of a significant merger-arbitrage play.
The filing, signed by Paul J. Glazer, indicates that the fund "has ceased to be the beneficial owner of more than five percent of the class" of Clearwater's Class A shares. The event date listed is June 24, one day before the company announced the completion of its take-private transaction.
Clearwater Analytics, a provider of investment accounting and reporting software, was acquired by a group led by private equity firms in a deal valued at approximately $8.4 billion. Shareholders received $24.55 per share in cash, with the transaction closing on June 25. The stock's last trade on the New York Stock Exchange printed at $24.56, just one cent above the deal price, reflecting a spread of only 0.04%.
Glazer Capital had been a significant holder of Clearwater shares leading up to the deal's completion. According to the fund's first-quarter 13F filing, it held 7,819,776 shares as of March 31, valued at $184.938 million. At the $24.55 merger price, that stake would have been worth approximately $191.98 million. The fund had increased its position by 4,675,247 shares from the prior quarter, indicating a substantial bet on the deal's success.
The Schedule 13G filing does not specify how Glazer Capital exited its position—whether through selling shares on the open market, tendering them in the merger, or another method. This lack of detail is notable because the stock price had already converged to the deal price before trading ceased, suggesting the market had fully priced in the transaction's completion.
Clearwater's take-private deal provided a benchmark for private software M&A valuations. The company reported first-quarter revenue of $221.2 million, with annualized recurring revenue (ARR) of $872 million and adjusted EBITDA of $77.4 million. The final transaction valued the company at roughly 9.6 times ARR, with equity holders receiving about $7.4 billion in cash at closing. Debt financing included a $2.7 billion senior secured term loan, a $500 million delayed-draw term loan, and a $325 million revolving credit facility.
Sandeep Sahai, Clearwater's CEO, stated that private ownership will enable the company to scale more effectively and accelerate development of its GenAI agentic platform. The company has requested that the NYSE halt trading and delist its shares, and it plans to file a Form 15 with the SEC to terminate its registration and reporting obligations.
The exit by Glazer Capital marks the end of a successful arbitrage trade, as the fund captured the narrow spread between the stock price and the deal price. The filing serves as a reminder of the dynamics at play in merger-arbitrage strategies, where investors bet on the completion of corporate transactions.
