28 Sep Boston equity firm becomes majority owner of Cedarburg-based Mortgagebot
Cedarburg, Wis. — Spectrum Equity Investors of Boston will become the new majority owner of Cedarburg-based Mortgagebot, a national provider of technology to mortgage lenders.
Spectrum on Wednesday announced that it has completed an $84 million recapitalization of Mortgagebot.
Following the transaction, Michael Kennealy and Benjamin Spero from Spectrum will join Mortgagebot’s board of directors. Terms of the transaction were not disclosed.
“Mortgagebot is a perfect fit for Spectrum, given our firm’s focus on recapitalizations of profitable software and information services companies with strong growth potential and recurring-revenue business models,” said Michael Kennealy, managing director of Spectrum Equity Investors. “Since Mortgagebot was formed eight years ago, the management team has done an exceptional job of developing the core product and establishing the company in the industry. We are excited about the company’s continued growth potential.”
Scott Happ, co-founder and CEO of Mortgagebot, said, “We are extremely pleased to have Spectrum as a new shareholder. We have maintained a dialogue with the Spectrum team over the past few years, and they were helpful in assisting us with considering various financing alternatives. Given Spectrum’s experience in the financial services technology industry and with similar technology-enabled services businesses, we were convinced they would be the right partner to support us in the next phase of Mortgagebot’s growth.”
Mortgagebot’s PowerSite product is a configurable, private-label service that enables lenders to extend their mortgage lending business online. There are currently more than 500 banks and credit unions using the PowerSite product, making it the most widely deployed online lending solution in the industry.
Debt financing for the transaction was provided by Comerica Bank, Technology Investment Capital Corp., and Associated Bank. Mortgagebot was advised on the transaction by Stephens, Inc.
Mortgagebot was founded in 1997 as a division of Marshall & Ilsley Corp. and spun off as an independent company through a management led buyout in April 2001.