Ellie Mae Reaches $3.7 Billion Deal With Thoma Bravo

The agreement to buy the mortgage origination technology provider includes a 35-day shopping period.
Lauren MuskettFebruary 12, 2019
Ellie Mae Reaches $3.7 Billion Deal With Thoma Bravo

Ellie Mae announced it has reached an agreement to be acquired by private equity firm Thoma Bravo. The company, which offers a cloud-based platform for the mortgage finance industry, said its board of directors unanimously approved the proposal for an all-cash transaction valuing Ellie Mae at approximately $3.7 billion.

Under the terms of the deal, Ellie Mae shareholders would receive $99 in cash per share, representing a 47% premium to the 30-day average closing share price and a 49% premium to the 60-day average closing price as of February 1, 2019, the company said.

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The agreement also includes a 35 day “go-shop” period that permits Ellie Mae to actively seek other proposals and terminate the merger agreement.

The transaction is expected to close in the second or third quarter of 2019. Ellie Mae’s headquarters would remain in Pleasanton, California.

Ellie Mae shares were up 19% in premarket trading Tuesday morning.

J.P. Morgan Securities served as financial advisor to Ellie Mae and Cooley served as its legal advisor. Jefferies LLC served as financial advisor to Thoma Bravo and Kirkland & Ellis served as its legal advisor. Jefferies is also providing financing.

“Ellie Mae delivers powerful and innovative mortgage technology solutions across every channel of the residential mortgage sector, enabling lenders to originate more loans while reducing costs and driving efficiency, quality, and compliance throughout the mortgage process,” Holden Spaht, a managing partner at Thoma Bravo, said in a statement. The company is leading the digital transformation of the residential mortgage industry, Spaht added.

Ellie Mae processes approximately 35% of all mortgage applications in the U.S.

“Since the founding of Ellie Mae more than 20 years ago, our mission has been simple – to automate everything automatable for the residential mortgage industry,” Ellie Mae CEO Jonathan Corr said in a statement.