Investment Firm Taking Stake in Guaranteed Rate

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MORTGAGE EXPERT
12 · 15 · 17

An investment firm with interests in firms like Black Knight Inc., ServiceLink Holdings LLC and Ten-X LLC is taking a stake in Guaranteed Rate Inc.

Chicago-based Guaranteed Rate
announced Thursday that it has reached an agreement to sell a material interest in the company to a private-equity firm.

While some of the proceeds will be used to
repurchase shares from existing shareholders, Guaranteed Rate plans to use the remainder for general corporate purposes.

Yesterday’s announcement indicated that the investment will be made by an affiliate of Thomas H. Lee Partners LP. The deal will give it “a meaningful minority stake in the company.”

The Boston-based firm invests in middle-market growth companies. In addition to Black Knight, ServiceLink and Ten-X — its portfolio includes First Bancorp and iHeartMedia Inc. In all, it reports interests in 29 businesses.

Guaranteed Rate said it plans to leverage
its enhanced capital structure to further develop proprietary products
through its private
label securitization and portfolio capabilities.

“Guaranteed Rate intends to build on its existing origination framework to create a next generation lending platform that further streamlines the mortgage process by enhancing workflow, allowing loan officers to spend less time working on individual files and more time developing relationships and growing the business,” the statement said. “Additional investments in technology, marketing and recruiting top producers will help the company grow market share and the Guaranteed Rate brand.”

The news release said Guaranteed Rate’s gross revenues last year were $778 million. This year’s mortgage originations are expected to exceed $20 billion,
about the same as the $22.9 billion previously reported for 2016.

Thomas H. Lee Partners Managing Director Ganesh Rao called the home lender “a fantastic company” in the announcement.

“When evaluating different opportunities in the mortgage space, it became clear to us that Guaranteed Rate is well-positioned to thrive and grow market share moving forward, and that it is a great company to partner with in the mortgage market,” Rao said. “Guaranteed Rate’s industry leading purchase origination mix, excellent track record of growth and experienced team make this a compelling opportunity for THL.”

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