US private equity firm Thoma Bravo has agreed to acquire Ellie Mae, a cloud-based platform provider for the mortgage finance industry, in an all-cash deal worth about $3.7bn.
Image: Thoma Bravo to acquire Ellie Mae for $3.7bn. Photo: courtesy of rawpixel/Unsplash.com.
As per the terms of the deal, Thoma Bravo will acquire Ellie Mae at $99.00 per share.
Ellie Mae’s technology solutions help in automating the mortgage process, thereby enabling lenders to originate more loans, bring down origination costs, and reduce the time to close.
Founded in 1997, the California-based mortgage finance software provider caters to banks, credit unions and mortgage companies of all sizes.
Thoma Bravo managing partner Holden Spaht said: “Ellie Mae delivers powerful and innovative mortgage technology solutions across every channel of the residential mortgage sector, enabling lenders to originate more loans while reducing costs and driving efficiency, quality and compliance throughout the mortgage process.
“Ellie Mae is leading the digital transformation of the residential mortgage industry and we look forward to building on the company’s successes and to our partnership through this next chapter of growth.”
Ellie Mae’s Encompass mortgage management solution and services helps lenders in keeping data secure, documentation accurate and mortgages moving in the right direction. Through the system, lenders originate, underwrite, and close loans using one single system without having to shift between various applications.
Ellie Mae president and CEO Jonathan Corr said: “Since the founding of Ellie Mae more than 20 years ago, our mission has been simple – to automate everything automatable for the residential mortgage industry.
“As we enter this next phase of our digital mortgage journey, we are thrilled to provide immediate value to our shareholders. With the investment and support from Thoma Bravo, we will remain committed to our customers’ success, innovation and growth of the Encompass Digital Lending Platform while maintaining our position as a best place to work.”
The agreement has been approved unanimously by Ellie Mae’s board of directors, who have recommended stockholders to vote their shares in its favor. Post-acquisition, the company’s headquarters will remain in Pleasanton with regional offices across the US.
Thoma Bravo has agreed to a 35 day “go-shop” period under which the mortgage finance software provider is free to terminate the agreement if it gets a superior proposal.
The transaction, which will not be subjected to any financial conditions, is anticipated to be completed in the second or third quarter of 2019.