Intuit Spins Off Quicken Loans
|June 21, 2002|
Founder, Chairman Dan Gilbert To Lead Investment Group
Inman News Features
Intuit Inc. (NASDAQ: INTU) today announced it has signed a definitive agreement to sell its Quicken Loans business to a newly created holding company owned by a group of private investors led by Dan Gilbert, chairman of Quicken Loans and founder of Rock Financial Corp., the predecessor of Quicken Loans.
Quicken Loans will become a wholly owned subsidiary of the new company and will continue to offer residential home mortgages and home equity loans under the Quicken Loans and Rock Financial brands following the close of the transaction. The new company will be based in Livonia, Mich.
"Intuit acquired Rock Financial and entered the mortgage origination business when consumer ?e-finance? services were central to Intuit?s strategy," said Steve Bennett, Intuit?s president and CEO. "Since then, Intuit has focused more on driving growth in small business and tax ? businesses where we have strong leadership positions in large and growing markets."
Gilbert will serve as chairman of the holding company, which has not yet been named. Bill Emerson, CEO of Quicken Loans, will serve as CEO. Patrick McInnis, president of Quicken Loans, will be the president. Jeff Eisenshtadt will continue as CEO of Title Source Inc. (also part of this transaction), which provides title insurance and settlement services nationally.
The new company said it will retain all of the 1,000 Quicken Loans, Rock Financial and Title Source employees.
Intuit will receive cash, a note, multi-year licensing fees and a 12.5 percent equity interest in the new company in exchange for all of the outstanding stock of Intuit's Quicken Loans and Title Source subsidiaries.
Intuit's current balance sheet reflects the current net value of the tangible assets it acquired (rather than the purchase price paid) because the December 1999 deal was accounted for as a pooling of interests. Accordingly, there will be no write-off of intangible assets associated with the sale of the business. Intuit expects to recognize a small gain on divestiture that will be reflected in its financial results. The transaction is expected to close within 90 days.
The new company will license the Quicken Loans trademark from Intuit, and the companies have entered into a five-year distribution agreement through which Quicken Loans will provide mortgage services on Quicken.com. Intuit will continue to provide a line of credit to fund mortgage loans up to six months after the transaction closes.
Copyright: Inman News Service