Guaranteed Rate to Acquire Stearns Holdings, LLC, Enhancing Mortgage Joint Venture Leadership While Building Additional Multichannel Capabilities
January 5, 2021 (CHICAGO) – Guaranteed Rate, one of America’s largest retail mortgage lenders, has announced it has entered into a definitive agreement to acquire Texas-based Stearns Holdings, LLC from funds managed by Blackstone. A national top 25 lender with more than $20B in origination volume in 2020, Stearns was founded in 1989 and operates in all 50 states through retail, joint venture, partnership and wholesale channels. The acquisition will enable Guaranteed Rate to bolster retail loan origination and further scale its JV platform, while also developing new multichannel capabilities.
The pending acquisition comes at a time of significant momentum for Guaranteed Rate, which recorded its best production year ever in 2020. The move builds on Guaranteed Rate’s track record of making and integrating successful acquisitions and connects directly to its goal of becoming the country’s #1 mortgage lender.
Guaranteed Rate’s experience and expertise in running joint ventures and partnership platforms is further enhanced by Stearns Holdings’ strong presence in these channels. Stearns Holdings has an extensive partnership model that includes real estate agent, builder and relocation joint ventures, private label relationships and independent mortgage bank preferred partnerships. These partnerships include well-known brands such as SoFi and Home Mortgage Alliance. Combining these entities with Guaranteed Rate’s existing joint ventures with Realogy and @properties will create one of the largest partnership platforms in the country. The acquisition also allows Guaranteed Rate to enter the wholesale channel to complement the company’s multichannel distribution vision.
Guaranteed Rate expects the deal to yield material synergies from stronger capital markets execution and shared services capabilities that will drive additional efficiency, growth and profitability.
“We’re excited about bringing Stearns Holdings into the Guaranteed Rate family,” said Guaranteed Rate President and Chief Executive Officer Victor Ciardelli. “Pairing the incredible talent throughout Stearns’ organization with that of our existing team exemplifies the best of the best in the mortgage business, yielding an even more powerful platform.”
Guaranteed Rate is acquiring the company from Blackstone, which will have an interest in Guaranteed Rate and will continue to support the integration and growth of the Guaranteed Rate vision. “We are fully behind Victor Ciardelli and the entire Guaranteed Rate team,” said Nadim El Gabbani, Senior Managing Director at Blackstone. “This combination creates a powerful player in the mortgage industry, and one that we believe is exceptionally well positioned for success over the long term.”
In the future, Guaranteed Rate plans to integrate and rebrand Stearns Holdings’ retail operation as Guaranteed Rate. The company’s wholesale and partnership businesses will remain as stand-alone operations, with current Stearns CEO David Schneider continuing to lead those operations.
“We're thrilled about this transaction,” said Schneider. “Guaranteed Rate is a formidable player in the mortgage industry, and this combination will empower our employees and partners to reach more customers, generate more business and guide more people through the homeownership journey.”
Sidley Austin LLP acted as legal advisor to Guaranteed Rate. Houlihan Lokey acted as financial advisor and Skadden, Arps, Slate, Meagher & Flom LLP acted as legal advisor to Blackstone and Stearns Holdings, LLC. The acquisition is subject to customary closing conditions, including regulatory approvals, and is expected to close in the first quarter of 2021. The description of the transaction contained herein is only a summary and is qualified in its entirety by the definitive merger agreement related to the transaction.
About Guaranteed Rate Companies
The Guaranteed Rate Companies, which includes Guaranteed Rate, Inc., Guaranteed Rate Affinity, LLC, and Proper Rate, LLC, has more than 9,000 employees in over 750 offices across the United States. Headquartered in Chicago, Guaranteed Rate Companies is one of the largest retail mortgage lenders in the United States, funding over $73 billion in 2020. Founded in 2000 and licensed in all 50 states and Washington, D.C., Guaranteed Rate Companies has helped homeowners nationwide with home purchase loans and refinances. The company has established itself as an industry leader by introducing innovative technology, offering low rates and delivering unparalleled customer service. 2017 marked the launch of Guaranteed Rate Affinity, LLC, a mortgage origination joint venture between Guaranteed Rate, Inc. and Realogy Holdings Corp. (NYSE: RLGY), a global leader in residential real estate franchising and brokerage. In 2020, the company launched Proper Rate, LLC, a mortgage origination joint venture between Guaranteed Rate, Inc. and @properties, one of the nation's largest residential brokerage firms. Collectively, the Guaranteed Rate Companies have earned honors and awards including: Top Lender for Online Service for 2018 by U.S. News & World Report; Best Mortgage Lender for Online Loans and Best Mortgage Lender for Refinancing by NerdWallet for 2021; HousingWire’s 2020 Tech100 award for the company’s industry-leading FlashClose SM technology; No. 3 ranking in Scotsman Guide's Top Retail Mortgage Lenders 2019; Chicago Agent Magazine’s Lender of the Year for five consecutive years; Chicago Tribune's Top Workplaces list for seven consecutive years. Visit rate.com for more information.