American Mortgage Consultants takes out big loan to buy JCIII & Associates

Secures large senior credit facility from Monroe Capital

Late last month, HousingWire reported that American Mortgage Consultants, a third-party loan data verification provider, acquired its major competitor, JCIII & Associates.

What wasn’t known at the time was how much American Mortgage Consultants was paying for JCIII & Associates.

And while the exact purchase price still remains unknown, a release from Monroe Capital, a provider of senior and junior debt and equity co-investments to middle-market companies, sheds some light on how much it cost American Mortgage Consultants to acquire JCIII & Associates.

According to a release from Monroe Capital, the company acted as “sole lead arranger and administrative agent” on a $27.5 million senior credit facility to American Mortgage Consultants, which was used to “support the acquisition” of JCIII & Associates.

It is not known how much of the $27.5 million loan American Mortgage Consultants used to purchase JCIII & Associates, but the size of the loan gives some insight into what it cost to create “the largest transactional due diligence firm in the residential mortgage space,” as American Mortgage Consultants billed itself when the deal was announced.

The new company will operate under the name AMC, and AMC CEO Michael Franco told HousingWire in December that the deal was a necessary next step in an industry that is going through a consolidation phase.

“The due diligence industry used to be 'mom and pop' players, that all has changed,” Franco told HousingWire in December. “The business is now institutionalized. You need to be able to do big trades for big players.”

Franco also said that the increased regulatory burden and higher cost to originate mortgages means greater demand for streamlined due diligence services.

The combined company’s corporate headquarters will remain in New York City, while the company’s operations will be headquartered in Tampa, with flexible satellite offices in big cities such as Chicago, Dallas, Denver and New York.

“This is an exciting development for both firms, which have long held a mutual respect for one another while competing in the marketplace,” JCIII founder and CEO John Childers said when the deal was first announced. “The new, combined entity offers a team of experts and suite of due diligence services unmatched in the industry.”

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