Acquiring Mortgage Companies
We have deep experience assisting strategic buyers of mortgage banking firms.
As we move through the current period of industry consolidation there will be ample opportunities to acquire mortgage banking companies. However, doing so successfully requires identifying quality targets, valuing them properly and coming up with the right deal structure in the circumstances. Once a preliminary deal is reached, a full spectrum of financial, operational, and regulatory due diligence must be performed along with a careful talent assessment. There is no substitute for experience here. Under the capable leadership of Larry Charbonneau, MorVest is uniquely well qualified to provide complete buy-side M&A services to strategic buyers.
It all starts with identifying the right targets, those that while potentially capital impaired, exhibit quality throughout the organization, a history of profitability and contained trailing risk. Business plans must be well defined, make sense in light of industry conditions, and the core competencies needed to execute well must be present. The opportunities for synergies on secondary execution, elimination of duplicate expenses and lower cost of funds must be balanced with cultural challenges and unexpected attrition.
Prudent valuation of targets is imperative to ensure investment returns are not jeopardized. We have substantial experience valuing mortgage companies, taking into account all components required to formulate the purchase price paid at closing and earn-out payments based on future performance. A good cultural fit is imperative to the success of mortgage company acquisitions, a factor routinely under appreciated. A key part of valuing companies from a purchaser’s perspective is to carefully assess whether key seller executives will remain with the target after closing and be properly motivated to contribute at a high level.