Thomas H. Lee Partners has agreed to make an investment in Chicago-based Guaranteed Rate Inc, a retail mortgage company. No financial terms were disclosed. Goldman Sachs served as financial adviser to Guaranteed Rate on the transaction while Barclays did likewise for THL.
CHICAGO, IL & BOSTON, MA – December 14, 2017 – Guaranteed Rate, Inc. (the “Company” or “Guaranteed Rate”), a leading independent retail mortgage company operating throughout the United States, today announced that it has entered into a definitive agreement with an affiliate of Thomas H. Lee Partners, L.P. (“THL”), a leading private equity firm that invests in middle market growth companies. Under the agreement, THL will make a material capital and strategic investment in the Company. A portion of the proceeds of the investment will be used by Guaranteed Rate to fund the repurchase of certain shares from the Company’s existing shareholders, and the remainder will be used for general corporate purposes.
THL’s capital infusion into Guaranteed Rate will be used to further enhance the Company’s value proposition to consumers, realtors and loan officers. 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. Additional investments in technology, marketing and recruiting top producers will help the Company grow market share and the Guaranteed Rate brand. Guaranteed Rate also expects to leverage its enhanced capital structure to further develop proprietary products through its private label securitization and portfolio capabilities. Company founder Victor Ciardelli III will continue to lead Guaranteed Rate as CEO and Chairman of the Board running day-to-day operations, while THL will have a meaningful minority stake in the Company.
“We are thrilled to announce our new partnership with THL as we enter another exciting phase of our growth strategy,” said Victor Ciardelli, Guaranteed Rate’s Founder and Chief Executive Officer. “THL has a long history of successfully collaborating with fast-growing companies like Guaranteed Rate, and they also bring the experience, capital and resources that will enhance our capabilities and help us move closer to achieving our ultimate goal of becoming the country’s largest retail mortgage lender. THL shares our core values of financial and operational discipline, combined with a culture of inventiveness, self-sufficiency and collaboration. We are very excited to begin this journey with them.”
“Victor and his entire team have built a fantastic company that is centered around a unique and innovative platform, which offers a seamless customer experience and a strong value proposition for consumers, realtors and the Company’s loan officers,” said Ganesh Rao, Managing Director at THL. “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. Guaranteed Rate’s industry leading purchase origination mix, excellent track record of growth and experienced team make this a compelling opportunity for THL. We look forward to working with Victor and the Guaranteed Rate team to maximize the potential of this business, and to further propel the Company’s continued growth and success in the years ahead.”
Headquartered in Chicago, Illinois, Guaranteed Rate is the sixth largest retail mortgage lender in the United States operating in all 50 states. The Company has built a national reputation as a highly dependable lender with best-in-class loan officers, technology, marketing, products, pricing and extremely high customer satisfaction rates. Since its inception in 2000, Guaranteed Rate has grown market share every year, through various business cycles. By creating an easy-to-understand, transparent loan process backed by highly skilled loan officers and the world’s first digital mortgage, the Company earned over $778 million in gross revenue in 2016 and expects to fund over $20 billion in new mortgage loans for consumers in 2017.
The transaction is subject to customary closing conditions and regulatory approvals and is expected to close in the first quarter of 2018. Terms of the transaction were not disclosed.
Goldman Sachs acted as financial advisor and Latham & Watkins LLP acted as legal advisor to Guaranteed Rate. Barclays acted as financial advisor and Kirkland & Ellis LLP acted as legal advisor to THL.
About Guaranteed Rate Inc.
Guaranteed Rate is one of the largest retail mortgage lenders in the United States. Headquartered in Chicago, the Company has approximately 220 offices across the U.S. and Washington, D.C., and is licensed in all 50 states. Since its founding in 2000, Guaranteed Rate has helped hundreds of thousands of homeowners with home purchase loans and refinances. The Company has become the Home Purchase Experts® by introducing the world’s first Digital Mortgage technology and offering low rate, low fee mortgages through an easy-to-understand process and unparalleled customer service. Guaranteed Rate won an American Business Award for its Digital Mortgage technology in 2016, ranked No. 1 in Scotsman Guide’s Top Mortgage Lenders 2016, was chosen as Top Lender 2016 and 2017 by Chicago Agent magazine and made the Chicago Tribune’s Top Workplaces list seven of the past eight years. Visit rate.com for more information.
About Thomas H. Lee Partners, L.P.
Thomas H. Lee Partners, L.P. (“THL”) is a premier private equity firm investing in middle market growth companies, headquartered in North America, exclusively in four industry sectors: Business & Financial Services, Consumer & Retail, Healthcare, and Media, Information Services & Technology. Using the firm’s deep domain expertise and the internal operating capabilities of its Strategic Resource Group, THL seeks to create deal sourcing advantages, and to accelerate growth and improve operations in its portfolio companies in partnership with management teams. Since its founding in 1974, THL has raised over $22 billion of equity capital, acquired over 140 portfolio companies and completed over 360 add-on acquisitions which collectively represent a combined enterprise value at the time of acquisition of over $200 billion.