UniversalCIS to use Lovell Minnick funding for more acquisitions

Credit data provider UniversalCIS, which has made three acquisitions since last August, has obtained additional capital to do more deals after private investment firm Lovell Minnick Partners took a majority stake in the company.

Terms of the transaction were not disclosed.

UniversalCIS, which is based in the Philadelphia area, has grown from approximately $20 million in revenue when Chairman Perry Steiner joined the company three years ago, under the name CIS Credit Solutions. It is now approaching $200 million in annual revenue.

With the acquisitions of Avantus and Universal Credit Solutions last year Steiner saw an opportunity to create a “significant player,” he said.

"I was able to piece together some of the best operating smaller businesses in the industry to create a top five player in credit," he added. "In doing so, I did not have any outside investors. We believe there's an opportunity to continue to consolidate our market and also most importantly, add technology solutions to the market."

So UniversalCIS sought to bring in a capital partner and Lovell Minnick was its top choice because of its background in investing in financial services technology businesses, he said.

UniversalCIS’s consolidation opportunities will increase as the mortgage industry becomes more digital, Steiner said.

Teaming up with Lovell Minnick will allow UniversalCIS to pursue much larger transactions than it has to date, he continued. Those may be in the credit data space as well in other related areas. For example, its acquisition of appraisal technology company SharperLending, late last year, allowed it to offer a fuller product set to its clients, Steiner said.

Among Lovell Minnick's prior investments was Attom Data Solutions in January 2019. Another is real estate technology provider Inside Real Estate.

There are no plans to integrate Attom and SharperLending into UniversalCIS.

UniversalCIS and Attom are separate portfolio companies for Lovell Minnick, Jason Barg, a partner at the private equity firm, explained. "There are opportunities for both to talk to each other and collaborate and share best practices, but they are two separate firms," he continued.

Lovell Minnick believes mortgage lending is "a sector where strong solution providers can generate market share and lead some consolidation of the industry," Barg said, adding the company believes in Steiner's vision. "There are a lot of exciting things that are happening in the mortgage value chain to enhance the efficiency of the origination process. We're excited that this is an entry for us into this particular category."

Steiner pointed out there has been a lot of investment in mortgage merger and acquisition activity as of late, with deals involving Ellie Mae (acquired by Intercontinental Exchange) and Optimal Blue (by Black Knight) as well as the capital raising success of companies like Blend — which just announced its purchase of Title365 from Mr. Cooper.

"It's no surprise that there's so much investment coming into the sector," he said. "Bringing the mortgage sector to the digital space has been slower than one might expect given its relative importance," he added, noting that it is likely the second largest capital markets sector, after U.S. Treasuries.