PROGRESS in Lending surveyed its 90,000 plus readers and they overwhelming say that mergers and acquisitions are heating up. The results were conclusive. In total, 100% of respondents said that this will be a banner year for mergers and acquisitions.
This continues a trend that we saw last year. The industry experienced the three biggest deals in its history last year: Quicken’s IPO in August, United Wholesale Mortgage’s SPAC acquisition in September, and Intercontinental Exchange (ICE)’s acquisition of Ellie Mae.
“These are amazing deals in themselves, but what they mean for the rest of the industry is noteworthy,” Senior Partner Garth Graham notes in the STRATMOR report. When public or private equity enters the market, it drives all values up, according to Graham, which is good news for prospective sellers. “Buyers see a strong mortgage market that is expected to continue to do well into 2021 and maybe even 2022, providing an opportunity to generate a return on their investment.”
The past year saw other deals as well, STRATMOR notes. In October, Guild Mortgage issued 6,500,000 shares in its first public offering and in November, NewRez submitted paperwork with the U.S. Securities and Exchange Commission for its own IPO. STRATMOR data currently shows equity investors or public companies now hold interest in 17 of the top 25 independent mortgage banks (IMBs) that collectively account for more than 40 percent of all IMB origination volume.
So buckle up, M&A was hot last year and it is going to be even hotter this year.
Respond to the new weekly survey HERE.