GTCR buys mortgage-tech provider Optimal Blue

GTCR, a pioneer in financial-technology investing, is buying Optimal Blue, the mortgage-technology provider.

Terms weren’t disclosed, but GTCR has committed to invest as much as $350 million of equity in the deal, a statement said. Serent Capital is the seller.

Chicago-based GTCR will have a majority of Optimal Blue while Serent is rolling over equity, Buyouts has learned. Management will also have a stake.

Optimal Blue, Plano, Texas, provides the communications network that enables investors to deliver mortgage information through lenders to consumers. The company employs about 250, said Larry Huff, Optimal Blue’s co-founder and co-CEO.

“Optimal Blue is a fantastic business with great founders and team,” said Collin Roche, a GTCR managing director. “We are looking to continue growth there and doing more acquisitions and building up in the mortgage vertical.”

Huff, along with co-CEO Ivan Darius, launched Optimal Blue in 2002. They are exiting with the sale and will remain involved as consultants, Huff said. Optimal Blue’s management is otherwise staying in place, Huff said.

Huff and Darius are selling some of their stake in Optimal Blue and rolling equity into the new company, Huff said. He declined to disclose how big their stake is.

GTCR, which typically partners with executives to build platforms, expects to grow the company through acquisitions and product innovation, Roche said.

Scott Happ, founder and former CEO of Mortgagebot, is joining Optimal Blue as CEO once the deal closes, the statement said. Sue Baker, a former Mortgagebot SVP, is joining as vice president of product. The sale is expected to close in the next four weeks.

Serent, a San Francisco private equity firm, targets sectors including business services and software, financial services, healthcare and consumer. Serent invested in Optimal Blue in 2013.

Optimal Blue went up for sale earlier this year, the Wall Street Journal has reported. Optimal Blue produces EBITDA of more than $15 million, two sources familiar with the situation said.

“There were quite a few strategic and financial sponsors involved,” a third person said. “It was very competitive.”

GTCR is a noted investor in fintech. The firm currently owns Callcredit Information Group, a British credit-checking agency and consumer-data provider that it acquired in 2014.

GTCR partnered with fintech veteran Douglas Bergeron to form Opus Global Holdings in 2013.

And GTCR was also one of the first owners of TransFirst, which was sold to TSYS earlier this year for $2.35 billion. (GTCR sold TransFirst to Welsh, Carson, Anderson & Stowe in 2007 for $683 million, which sold it to Vista Equity Partners in 2014 for $1.5 billion. Vista then sold TransFirst to TSYS in April.)

GTCR is using its 11th fund, which raised $3.85 billion in 2014, to invest in Optimal Blue, Roche said.

Cision, a GTCR portfolio company, on Friday also closed its buy of PR Newswire. The WSJ valued that deal at $841 million. GTCR used its 10th fund to invest in PR Newswire, Roche said. The 10th pool collected $3.25 billion in 2011.

GTCR’s 11th fund is nearly half-invested, one of the two sources said. The Chicago buyout shop could be back on the fundraising trail in 2017 with its 12th pool, the person said.

Brian Bratcher of Stephens Inc advised GTCR. Steve McLaughlin of FT Partners advised Optimal Blue.

Serent could not be reached for comment.

Action Item: Contact Optimal Blue: support@optimalblue.com

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