Mortgage software giant Ellie Mae is going private. The publicly traded company announced Tuesday that it would be acquired by private equity firm Thoma Bravo, LLC for $3.7 billion.
Ellie Mae, founded in 1997, processes 35 percent of all mortgage applications in the U.S., according to Banking Tech.
The deal is expected to close in the second or third quarter of 2019, after a 35-day period where other Ellie Mae can consider other offers.
As part of the agreement, Ellie Mae shareholders will receive $99 per share, based on a 47 percent premium to the 30-day average closing share price and 49 percent premium to the 60-day average closing price as of February 1, 2019.
“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,” said Ellie Mae president and CEO Jonathan Corr in a prepared statement. “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,” he added.
Ellie Mae’s cloud-based mortgage management platform, Encompass, includes 20 products for consumers, loan officers, wholesale and correspondent investors and lenders, including Equifax Inc, Fannie Mae, and Freddie Mac.
The latest update to the Encompass platform released on Feb. 11 includes expanded Home Equity Line of Credit (HELOC) origination support and Americans with Disability Act (ADA) capabilities for the company’s consumer product.
In the moments after the announcement, Ellie Mae’s shares experienced a 19 percent boost in premarket trade, according to a MarketWatch report.
“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,” said Thoma Bravo Managing Partner Holden Spaht.
“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.”