Controlling interest in Merix Financial has been sold to a large international equity firm, the lender’s CEO Boris Bozic told MortgageBrokerNews.ca in an exclusive interview, also sharing the news with employees Thursday.
“We made the announcement to our team today,” the company’s founder said Thursday afternoon. “This is great day for our company and our customers. With the tremendous strength of our new partners, Merix is looking forward to building on its support of independent mortgage professional as we grow our market share and continue to bring innovative and professional solutions to our customers.”
The news ends weeks of speculation about the sale of one of the broker channel’s most important monolines but also its sister firm Paradigm Quest, the industry’s leading mortgage servicing company.
The deal -- for an undisclosed amount -- sees an institutional investment group, led by Culpeper Capital Partners, take that majority stake, although the current management team will continue to operate and lead the business on a day-to-day basis.That very much includes Bozic and partner Kathy Gregory, Paradigm's head.
Culpeper and the new institutional investment group will provide ongoing strategic support, however, with an eye to bolstering its already winning performance, said Bozic, whose trailer fee compensation has helped cement relationships with veteran brokers from one end of the country to the next.
That may have played a role in attracting Culpeper even in a slower market.
“MERIX is a unique player in the residential mortgage space with opportunity to grow market share,” said David E. King, senior managing director for the firm. “We are very excited to be in a position to provide assistance to the MERIX management team as they pursue the company’s future growth.”
Founded in 2005, Merix was quick to grow market share, achieving Top 7 ranking within a year. By 2007 it had grown volume by 78 per cent, and within 12 months would be in key markets across Canada. It is a multiple-winner of CMP lender awards for excellence and now claims over $15 billion in funded mortgages.
Brokers are now expected to turn their attention to Culpeper as they parse through the meaning of today’s announcement.
The equity firm was founded in 2011 and focuses exclusively on financial and business services. The firm operates as a joint venture partner with Fortress. It also provides capital in traditional management buyouts and “other opportunistic situations involving financial services platforms and assets.”