Analysts say high ticket price could be big hurdle to any deal.
The possible sale of Advent Software Inc. has advisers on alert for indications of who — if anyone — will put in a winning bid for the San Francisco firm, a longtime leader in portfolio accounting tools for advisers.
Advent officials have refused to comment on rumors that began Tuesday that it had hired Frank Quattrone's investment bank, Qatalyst Partners, to help the software company look for buyers.
Analysts who track Advent said it's difficult to know the impact a sale would have on Advent's customers until a buyer emerges.
“It depends on who is buying it and what their intentions are,” said Chris Donat, an analyst with Sandler O'Neill + Partners LP. “But it probably wouldn't change much.”
Private-equity firms are said to be showing the most interest in the company, though there's a large price gap between what company officials expect to get for the company and potential buyers' offers, according to a Reuters report.
That gap could forestall any deal because the company doesn't have to sell, analysts speculated.
Pete Heckmann, an analyst with Avondale Partners LLC, said Advent's valuation is among the highest in its peer group and it could be challenging to find a buyer that sees enough value in the firm to pay that kind of a premium. Private-equity firms typically seek to buy businesses at a discount and build them into more profitable operations that they can then sell to benefit their own shareholders.
Advent shares rose nearly 12% to almost $30 a share, from about $26.50, during the first day of trading after the sale rumors began to fly. That brought the company's market capitalization to nearly $1.5 billion. Shares have traded at between $28.50 and $29 over the past day.
Officials at Advent competitor Orion Advisor Services LLC were quick to suggest that an ownership change could lead the firm to change its focus or even move to retire older technologies.
"I think it creates some questions from advisers who use Advent," said Jon Reiners, Orion's vice president of institutional business development.
He pointed to Advent's own purchase of TechFi Corp. in 2002. Three years later, Advent discontinued development and support of the application.
However, Mr. Reiner also said that if Advent became a private company, it would not have to about shareholder interests and could focus solely on customers. Orion is a private company.
Advent's most recent change in its portfolio management software for advisers involved the purchase of competitor Black Diamond Performance Reporting in April 2011. That deal was meant to retain customers who were expected to upgrade their systems from Advent's Axys and migrate to Black Diamond's latest open-architecture portfolio accounting software, Mr. Donat said.
