Tequity Inc. has been engaged on an exclusive basis to assist one of Canada's premier developers of Mortgage & Loan Administration Systems find a strategic partner interested in acquiring the firm.

M1 was founded in 2005 by some of Canada's most experienced architects of Mortgage Administration systems intent, on modernizing and simplifying software used to administer and manage the complexity of the Mortgage Industry.  Recently completed, their suite of applications now provide a Cloud-based modular solution providing a hosted recurring revenue business model. 

Leading Technologies

M1 provides and supports Mission Critical Systems.  With a robust development platform, the modules are parameter configured, avoiding costs and delays of setting up new products and services.  The systems make use of Microsoft SQL database and are scalable to meet the needs of any size organization.  Designed from inception as a modular multi-tenant SaaS system, the solutions run in a hosted environment in one of Canada's leading Tier1 Data Centres.

Leading Applications

Designed to simplify the complex tasks associated with the mortgage industry, the applications offer:

·         Workflow-based and workload balancing loan origination / underwriting / advancing systems

·         Mortgage Servicing

·         Document Management

·         Customer Retention Systems

·         Payables Management

·         Tax Administration

·         Securitization & Portfolio Administration, including MBS / CMB

·         Business Intelligence Analytics

·         Mortgage Broker Portal

·         Commission / Rewards / Points Management

The systems also have integrations with applications that provide:

·         Mortgage Insurance Approvals

·         Credit Bureau Data

·         Broker Originated Mortgage Feeds

·         Collection and Payment Processing

·         Mortgage Insurance Underwriting

·         Accounting Systems

Revenue

The company has achieved revenue approaching $2M.  After completing its development phase, the company is now cash flow positive and is forecasting EBITDA of over 20%.  The company has some tax losses it is carrying.

Ownership & Control

The company has a small number of shareholders.  Majority interest is held by a Canadian subsidiary of a large multi-national firm.  The founders who also work in the company own the balance of the shares.   The shareholders are seeking to find a strategic buyer to acquire ownership of the majority interest and will consider selling 100% of the equity.

Replacement

The capital required to develop the applications approaches $5M and the estimated timeline for replication of the functionality of the systems is over 4 years.

Management

Management and staff wish to remain with the company post-transaction to assist in ongoing success.

Market & Clients

Residential mortgages issued in Canada were just under $1Billion last year.  These are handled by the Chartered Banks, Credit Unions, and increasingly by non-deposit taking organizations.  M1 has designed systems to accommodate the needs of all of these, and provides additional functionality to assist with mortgage processing and additional types of secured and unsecured, lending products including, line of credits, car loans, personal loans and commercial lending.  M1 has successfully implemented its applications with a diverse group of companies within the market.

M1 will be of interest to:

• Companies providing solutions and services to the commercial and residential real estate markets.  This may include inspections, appraisals, insurance, etc.

• Companies providing solutions and services to the financial services industry, particularly in the loans, credit, collections, tax etc.

• Companies providing solutions and services relating to document management and workflow, wishing expansion into the mortgage industry.

• Companies providing solutions and services relating to the Canadian homebuilding industry wishing to deepen their service offering.

• Existing providers of technology solutions to the Canadian mortgage market wishing to acquire Cloud-based leading technology.

• Private Equity Groups, Venture Capital and Angel investors with relevant portfolio companies seeking to bulk up, or acquire a profitable revenue-generating tuck-in.

• Larger Financial Institutions with substantial assets under administration wishing to replace ageing legacy applications.

Should you have any interest in exploring this opportunity, we welcome the chance to speak with you. All replies will be kept in the strictest confidence.

For more information please contact Kevin Tribe at 416.483.9400 x101 or by email