Thoma Bravo on Tuesday said it will take over cloud-based mortgage finance platform Ellie Mae in a $3.7 billion deal, with Kirkland & Ellis LLP steering the private equity firm and Cooley LLP guiding the seller.
Thoma Bravo LLC said it will pay $99 for each Ellie Mae Inc. share, representing a 20.8 percent premium on the company’s closing share price Monday.
Pleasanton, California-based Ellie Mae provides an automated platform called Encompass, which is designed to streamline the mortgage lending process. The company caters to banks, credit unions and mortgage companies, and markets itself as a way to improve compliance, quality and efficiency.
“Ellie Mae is leading the digital transformation of the residential mortgage industry, and we look forward to building on the company’s successes and to our partnership through this next chapter of growth,” Thoma Bravo managing partner Holden Spaht said in a statement Tuesday.
Ellie Mae said its board of directors unanimously approved of the take-private deal, which is expected to close in either the second or third quarter of 2019.
“With the investment and support from Thoma Bravo, we will remain committed to our customers’ success, innovation and growth of the Encompass digital lending platform while maintaining our position as a best place to work,” Ellie Mae President and CEO Jonathan Corr said in a statement.
The tie-up also includes a 35-day “go-shop” period, which allows Ellie Mae to seek out or consider acquisition offers from other sources. There can be no guarantee the go-shop period will lead to a superior offer, and Ellie Mae said it does not plan on disclosing developments related to the solicitation process unless the board makes a final determination.
Ellie Mae’s sale to Thoma Bravo comes around a year and a half after the company teamed up with Cooley on its $128 million deal for sales acceleration platform Velocify.
Meanwhile, Tuesday’s take-private deal represents the latest collaboration between Kirkland and Thoma Bravo. Among other deals involving the pair, Kirkland guided Thoma Bravo on its $950 million acquisition of application security testing platform Veracode from Broadcom Inc. in November. Kirkland also represented Thoma Bravo in 2017 when it took Barracuda Networks Inc. private in a $1.6 billion deal.
Ellie Mae is represented by a Cooley LLP team led by partners Jamie Leigh, Ben Beerle and Matthew Hallinan.
J.P. Morgan Securities LLC is serving as financial adviser to Ellie Mae.
J.P. Morgan is represented by a Skadden Arps Slate Meagher & Flom LLP team including M&A partner Leif King and associate Peter Jones.
Thoma Bravo is represented by a Kirkland & Ellis LLP team led by corporate partners Ted Peto and Peter Stach and associates Amelia Runyan Davis, Christopher Grady and Kaycie Rupp.
Jefferies Finance LLC is serving as financial adviser to Thoma Bravo.