|Small and mid-size mortgage companies are the acquisition targets of a boutique financial services firm that seeks to create a diverse integrated operation.
The firm, W. J. Bradley Co., has acquired five mortgage companies since it began the acquisitions in 2004 and is “in the process of closing on another three businesses this first quarter of ’07 and looking to probably acquire maybe another four or five this year,” Associate Brian Buckley told MortgageDaily.com.
“The companies we acquire don’t change their names or the way they do business and we let them operate sort of as they’ve been operating before we took over,” he explained. “We hold them and bring in the capital and the resources and the infrastructure that is necessary to get them to the next level and to make them more profitable.
“Our ultimate goal,” he added, “is to get them integrated.”
By bringing together many small mortgage companies, each with different product niches and operating in different geographical areas, he pointed out, the Denver-based company can form a diverse entity with full-service capacity.
“As we acquire and integrate these companies, there’s a lot of hurdles when trying to get everybody up on the same key central systems and resources and infrastructures and able to funnel volume through our centralized bank, which handles the warehousing and secondary functions for our companies,” Buckley explained. “Getting everybody integrated is always a challenge, especially when you’re buying a lot of different small to mid-sized mortgage companies from around the country.
“We want to increase their profitability and make them more attractive and robust as a whole,” he said, “so when we take them to market to sell to, like a Wall Street investor, all the companies are in line and our organization [of them] looks pretty sleek.”
He declined to identify the companies, but one, MortgageDaily.com learned, is San Francisco-based Triton Funding Group, a firm with three offices in the Bay area, nearly 50 employees and $1 billion in annual volume. The company originates a wide range of fixed-rate loans, adjustable-rate loans tied to either LIBOR or COFI, graduated payment mortgages, balloon mortgages and reverse mortgages. That acquisition was completed in March of last year.
At that time, Richard Feldman, who brokered the sale for Triton, noted that W.J. Bradley would provide “additional capital to expand production, open additional offices and price more aggressively in an increasingly competitive California market.”
The other acquisitions, according to information from W.J. Bradley, may include a California-based lender that does primarily Alt-A loans but also conventional and subprime, with branches in five other states and with a $4.6 billion net worth and $440 million annual production, an Ohio-based lender licensed in 13 states with a net worth of $1.006 million and annual loan volume of $693 million that includes FHA, VA and conventional loans, and a North Carolina-based lender with a net worth of $501,000 and annual loan volume of $240 million and that operates in six states. Its product mix is 55% non-conforming, 44% conforming and 1% FHA and VA.
W.J. Bradley isn’t earning any income from these companies, Buckley pointed out. All income is invested back into those companies to improve their operations.
“We make our money off of our subsidiaries. We don’t generate income any way other than that,” he said.
W. J. Bradley, as a member of the National Association of Securities Dealers, has an investment banking division as well as other divisions, including a private equity division that provides debt and other capital.
Jerry DeMuth is an award winning journalist who has been reporting for four decades.
e-mail Jerry at firstname.lastname@example.org
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