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Ellie Mae to be acquired by Thoma Bravo for $3.7 billion

Deal expected to close later in 2019

Ellie Mae announced Tuesday it entered into an agreement to be acquired by Thoma Bravo, a private equity investment firm.

The deal is an all-cash transaction of $3.7 billion. Ellie Mae announced that under the terms of the agreement, its shareholders will receive $99 per share in cash. This is a 47% premium to the 30-day average closing share price and a 49% premium to the 60-day average closing price as of Feb. 1, 2019.

“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 President and CEO Jonathan Corr said. “As we enter this next phase of our digital mortgage journey, we are thrilled to provide immediate value to our shareholders.”

“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,” Corr said.

Ellie Mae’s board of directors unanimously approved the deal and recommended that stockholders vote their shares in favor of the transaction.

“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,” Thoma Bravo Managing Partner Holden Spaht said. “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.”

Ellie Mae's headquarters will remain in Pleasanton, California, with regional offices across the U.S.

Closing the transaction is still subject to approval by Ellie Mae stockholders and regulatory authorities and the satisfaction of customary closing conditions. It is expected to close in the second or third quarter of 2019.

The acquisition agreement includes a 35-day “go-shop” period that permits Ellie Mae’s board and advisors to actively initiate, solicit, encourage, and potentially enter negotiations with parties that make alternative acquisition proposals. Ellie Mae will have the right to terminate the merger agreement to enter into a superior proposal subject to the terms and conditions of the merger agreement. There can be no assurance that this 35-day “go-shop” will result in a superior proposal, and Ellie Mae does not intend to disclose developments with respect to the solicitation process unless and until the board makes a determination requiring further disclosure.

JPMorgan Securities is serving as Ellie Mae’s exclusive financial advisor, and Cooley is acting as the legal advisor. For Thoma Bravo, Jefferies served as the financial advisor and Kirkland and Ellis as the legal advisor.

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