Mortgage

Guild Mortgage goals to boost round $ 176 million within the IPO

Guild Mortgage is the latest non-bank mortgage lender to apply for an IPO. The deal is expected to cost between $ 17 per share and $ 19 per share.

This is the sixth mortgage company to go public in the past few weeks, most recently Finance of America.

Guild's offering will consist of 8.5 million Class A shares with an additional 1.275 million shares that could be sold under the option of the subscribers. In the middle of the price range, Guild would raise approximately $ 176 million with the additional shares.

However, there will be a Class B common share giving its sole holder, McCarthy Partners Management, 10 votes per share. As a result, McCarthy will have nearly 95% of the combined voting rights.

In 2007, the company took control of Guild with a stake in McCarthy. Upon completion of the IPO, management will own approximately 21% of the outstanding common stock, according to the prospectus.

"Through steady organic growth and a series of targeted acquisitions, we have increased our annual origination volume from $ 1.4 billion for the year ended December 31, 2007 to $ 27.8 billion for the twelve months ended June 30 and our service portfolio expands from $ 2.5 billion in unpaid principal as of December 31, 2007 to $ 52.8 billion UPB as of June 30, "the guild's prospectus states.

For the first six months of this year, Guild posted net income of $ 110.8 million, including net income of $ 322.9 million from the origination segment and net losses of $ 147.8 million from mortgage servicing and $ 64.4 million. USD from other areas.

In the first half of last year, the company lost $ 47 million, due to a loss of $ 104.1 million in its service business.

According to preliminary estimates, Guild expects net income between $ 178 million and $ 187 million for the period, the prospectus says. It earned $ 8.5 million in the third quarter of 2019.

On the origination side, 96.5% of the volume came from retail, in 2019 it was only 3.5% in the correspondence channel. The origination volume for the third quarter was USD 10 billion, according to the prospectus.

The CEO of Guild is Mary Ann McGarry. Under her leadership, the company has grown to become a mortgage lender who has always topped the J.D. Power stand. In the 2019 survey, it was third with 854 points, behind Quicken and Fairway Mortgage. The survey for 2020 is expected to be published in November.

In the 2020 Servicer Survey, Guild ranked ninth, but with 803 it was well above the industry average of 781.

The company has made six acquisitions since 2007, the most recent being Cornerstone Mortgage in 2018. This acquisition expanded the San Diego-based company’s presence in the Midwest.

Risks to be considered in the prospectus included a case filed against Guild under the False Claims Act of 2016, in which loans remained active between 2006 and 2011.

The publicly traded company is called Guild Holdings and trades on the New York Stock Exchange under the ticker symbol GHLD.

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