Levine Leichtman Hits 7x on Sale of Ugly Houses
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Levine Leichtman Hits 7x on Sale of Ugly Houses

LLCP acquired HomeVestors in April 2017 and, according to a source familiar with this transaction, LLCP earned seven times its invested capital

HomeVestors is a real estate investment franchisor that assists its franchisees in operating their own residential real estate investment business

SOURCE: HomeVestors of America

Levine Leichtman Capital Partners (LLCP), has sold its portfolio company HomeVestors of America to Bayview Asset Management.

LLCP acquired HomeVestors in April 2017. According to a source familiar with this transaction, LLCP earned a return of more than seven times its invested capital.

HomeVestors is a real estate investment franchisor, providing services and education to franchisees seeking to operate their own independent, residential real estate investment business. The company generates proprietary real estate investment opportunities through advertising campaigns that utilize the “We Buy Ugly Houses®” national brand. HomeVestors, led by CEO David Hicks, was founded in 1996 and is headquartered in Dallas, Texas.

“We could not be more grateful for LLCP’s support over the course of our partnership,” said Mr. Hicks. “LLCP’s experience in franchising was key to our choice of a private equity partner given their quick understanding of our business and ability to offer valuable insight and guidance. We have appreciated LLCP’s support in advancing our strategic initiatives and have benefitted greatly from the collaboration. While we will miss LLCP and their valuable strategic additions to the company, we believe that HomeVestors’ best days are ahead of us, and we look forward to executing on that growth alongside Bayview.”

“David Hicks and his management team have driven significant growth during LLCP’s investment through strong same-store sales and exceptional growth of the franchise base,” said Matthew Frankel, a managing partner of LLCP. “In addition, we are proud that the company’s growth was enhanced by our collaboration on specific value creation initiatives, including technology investments, expanding the vendor network and adding additional revenue streams. We are grateful for the terrific partnership we had with the HomeVestors team during a period of incredible growth for the company. HomeVestors has an exciting future as the leading franchisor of real estate investment services and largest home buyer in the U.S., and we wish the team continued success.”

LLCP invests in middle-market companies located in the United States and Europe. Sectors of interest include consumer and branded products, franchises, business services, healthcare, education, engineered products and light manufacturing. In September 2021, LLCP closed its latest fund, LLCP Lower Middle Market Fund III LP, with total capital commitments of $1.38 billion. The new fund was oversubscribed and closed at its increased hard cap.

The sale of HomeVestors is LLCP’s seventh exit in the last year and follows the sale of West Academic (January 2022), Best Lawyers (December 2021), Caring Brands (October 2021), FlexXray (July 2021), Trinity Consultants (June 2021) and Nothing Bundt Cakes (May 2021).

Since its founding in 1984 by Arthur Levine and Lauren Leichtman, LLCP has managed approximately $12.8 billion of institutional capital across 15 investment funds and has invested in over 90 portfolio companies. LLCP currently has $8.9 billion of assets under management with offices in Los Angeles, New York, Chicago, Charlotte, Miami, London, Stockholm and The Hague.

Bayview Asset Management, the buyer of HomeVestors, is an investment management firm that specializes in mortgage and consumer credit, including whole loans, asset-backed securities, and mortgage servicing rights. As of September 2021, the firm had $14.7 billion of assets under management. Bayview was founded in 1993 and is headquartered near Miami in Coral Gables, Florida with additional offices in New York, London, and Geneva.

William Blair & Company was the lead financial advisor to HomeVestors with support from North Point Advisors.

© 2022 Private Equity Professional | January 14, 2022

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