Advectis provides an electronic document collaboration network for the mortgage industry. The application enables mortgage originators to significantly increase the volume of loans that their loan officers can make, and also reduces the cost of processing a mortgage for underwriters, mortgage insurance providers, due diligence firms, loan issuers and secondary market participants.
A six-year old “software as a service” (or SaaS) provider, Advectis had grown steadily and become profitable, making it an attractive platform target for any number of potential acquirers. The Company engaged Croft & Bender to assist in evaluating a series of options, ranging from a private equity financing to an outright sale. In the summer of 2007, after the Company had entered into a letter of intent with a strategic buyer, the mortgage industry suffered its worst setback in several decades with several large originators and issuers declaring bankruptcy.
Croft & Bender advised management to directly test the acquirerÕs resolve to complete the transaction in light of the change in circumstances. Because other alternatives were known to be available, the acquirer proceeded to expeditiously complete the transaction, after making a very modest adjustment to the purchase price. The ultimate transaction reflected an attractive multiple commensurate with the CompanyÕs status as a network-based, SaaS provider to the mortgage industry.