Cedarburg, WI - Spectrum Equity announced today that it has completed an $84 million recapitalization of Cedarburg, Wisconsin-based Mortgagebot, a leading provider of technology solutions to mortgage lenders. Following the transaction, Michael Kennealy and Benjamin Spero from Spectrum will join Mortgagebot's Board of Directors, and Spectrum will own a majority stake in the company. 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 fully configurable, private-label service which enables lenders to extend their mortgage lending business online. The product fits seamlessly into the rest of a lender's operations. There are currently over 500 banks and credit unions using the PowerSite product, making it the most widely deployed online lending solution in the industry.
"The feedback we received from the company's customers about the quality of the PowerSite product and the level of support was outstanding," said Benjamin Spero, Vice President at Spectrum Equity Investors. "Given Mortgagebot's reputation in the industry, the company should benefit as more lenders embrace the internet as an important distribution channel."
Debt financing for the transaction was provided by Comerica Bank, Technology Investment Capital Corporation, and Associated Bank. Mortgagebot was advised on the transaction by Stephens, Inc.