Mortgage Contracting Services, a company known in the industry for its standard and real estate services, has undergone a recapitalization and change of ownership.
The group of investors who acquired the company included Littlejohn & Co., Lynstone SSF Holdings Sàrl, the Crescent Capital Group and funds advised by Neuberger Berman Alternatives Advisers.
The acquisition "significantly reduces" the company's debt and gives it access to long-term financing, according to a press release from MCS released on Monday.
"We are excited to work with our new owners to further strengthen our business," said CEO Caroline Reaves in the press release.
Caroline Reaves, CEO of MCS
The financial terms of the transaction were not disclosed.
The move comes three years after private equity firm American Securities bought MCS from Concentric Equity Partners in May 2017.
MCS has been an active purchaser itself for the past four years. In 2016 Epiq Real Estate Solutions and Lenders Title Solutions were bought. Following its acquisition by American Securities, MCS acquired Carrington's property protection division in 2017. Last year MCS bought M&M Mortgage Services.
M&A and investment activity in the distressed mortgage market may pick up, in part, as higher demand for distressed mortgage services is expected due to high unemployment and widespread economic uncertainty.
Distressed loan servicing is highly regulated and involves high costs. Therefore, companies in the industry must have a combination of efficient and compliant operations in place to be effective and generate adequate returns.
As a result, some companies may be looking for investors to help them pay rising expenses while others seek to acquire or invest economies of scale.
Other recent examples of acquisitions with a distressed mortgage component include the acquisition of Accumatch by Lereta, a company that provides escrow tax payment services, non-escrow tax services and custom crime services to credit servicers.
"We have seen firsthand that the tax industry is underserved with expertise and innovation. We are excited to bring our organizations together," said Brad Martin, chief technology officer at Lereta, a provider of property tax and flood services.
The terms of the contract were not disclosed.