Sun Capital purchases mortgage audit company LoanLogics

Private equity firm Sun Capital Partners acquired LoanLogics, a digital mortgage audit software provider, as one of its initial investments in its newly established technology vertical.

Terms of the deal were not disclosed. LoanLogics, headquartered in Jacksonville, Fla., had a post-money valuation of between $50 million and $100 million following a 2016 investment according to Crunchbase.

"The support and resources Sun Capital is capable of providing to companies like ours will enable us to continue to ensure quality performance for our clients, enhance our operations and serve the rapidly modernizing mortgage technology market," LoanLogics CEO Bill Neville said in a press release.

This is not Sun Capital's first go-round in the mortgage industry. The Boca Raton, Fla.-based company’s previous investment in subprime mortgage lender First NLC of Deerfield Beach, Fla. had mixed results. Sun Capital provided a portion of the financing for the management team to reacquire the company in 1999.

First NLC was sold to Friedman, Billings, Ramsey in 2005. But two years later, as the subprime market crashed, Sun Capital reached an agreement to become the majority owner in a failed attempt to recapitalize First NLC, which shut down in 2008.

Sun Capital is classifying the LoanLogics deal as an investment in a technology company; this is the second since formally entering the vertical, after digital platform engineering services provider Exadel.

"Inefficiencies in data and workflow are driving rising mortgage market costs," said Marc Leder, Sun Capital's co-CEO. "We look forward to applying our operating experience to accelerate their growth."

LoanLogics adopted its current name in 2013 following the merger of product and pricing engine provider NYLX (formed in 2005) and quality control technology firm Aklero (created in 2007).

In November of that year, Volition Capital became the first private equity firm to put money into LoanLogics, contributing $10 million. Existing investors contributed another $1.2 million at that time (Aklero also did a seed round in 2011 of $1.2 million).

Blue Cloud Investors teamed up with Volition to make an additional $10 million investment in March 2016.

Finally, last May, Robin Hood Ventures invested $6.6 million in exchange for a convertible note.