As the commercial mortgage lending and brokerage business is beginning to see an increase in M&A activity, San Francisco, California-headquartered Parthenon Capital Partners acquired a stake in loanDepot, an online mortgage origination company. Terms of the transaction were not disclosed.
The Irvine, California-based mortgage website was founded by Anthony Hsieh, the former president of LendingTree, LLC, in 2003.
Managing partner Brian P. Golson, head of Parthenon’s San Francisco office, and Andrew Dodson, a principal at the firm, worked on the transaction. Golson, an AmWINS director, was formerly chief financial officer and vice president of operations at the Fremont, California-headquartered software company Everdream Corporation.
Dodson declined to comment on the size of Parthenon’s stake in the business, or whether they will own a control stake in the new company. In speaking with Mergers & Acquisitions, he said Hsieh “worked very closely to build their technology and systems around the new regulatory requirements.” He compared the venture’s situation to larger warehouses who are now “scrambling to retrofit their systems.
The management team will include several former executive of LendingTree, including Tomo Yebisu, who will serve as loanDepot’s president; John Lee, the company’s chief financial officer; and Jim Svinth, head of capital markets. “The band is back together,” Dodson said.
Hsieh told this publication the company will focus mainly on organic growth, but is “certainly going to be looking at add on acquisitions.” He plans to expand to employ over 1,000 employees by 2013.
Parthenon previously invested in related finance and real estate transactions. In October 2005, the firm acquired AmWINS Group, a wholesale insurance company. In December 2006, the buyout firm joined an investors’ group that included Kelso & Company and GS Capital Partners, in purchasing a Carmel, Indiana-based auctions company ADESA, Inc.
The purchase of loanDepot comes as several related mortgage companies are seeing increased interest from PE buyers. GMAC LLC, for instance, is looking to divest of its residential mortgage unit, Residential Capital LLC. Last month, The New York Post reported that Warren E. Buffett was in talks to buy the ailing mortgage unit. Earlier this week, American Eagle Mortgage Co, LLC agreed to purchase Real Estate Mortgage Corp.’s assets.
In addition to Parthenon’s San Francisco headquarters, the firm has a secondary office in Boston, Massachusetts. Calls placed to the firm were not returned by press time.