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Consolidating fragmented markets

MCS Group

Through accretive buy-and-build we have created one of the leading businesses in the property services sector.

Description

MCS Group (“MCS”), headquartered in Texas, USA, provides property-related services to mortgage lenders and servicers for newly originated mortgages and for mortgages in default. The business operates in all US states, providing title and closing, valuation, inspection, maintenance and preservation services for residential properties.

Transaction

Our original insight on the opportunity for MCS was generated from our involvement in VPS, one of TDR's other portfolio companies.

In 2009, whilst getting to know the VPS business, we developed an understanding of the macroeconomic trends in the US, where mortgage defaults and repossessions were at historically high, and increasing, rates, and the changing regulatory landscape driving increased outsourcing in the mortgage industry.

Given our belief in the opportunity for growth in the US market, after the 2010 acquisition of VPS, we refocused its priorities and encouraged the company to bid aggressively for larger, national contracts in the US.

In October 2013 we completed the transformational acquisition of MCS. Concurrently we separated VPS US from its European parent and along with MCS it formed the larger MCS Group.

The transaction was compelling from a number of standpoints, including synergies that were quick to implement and the businesses’ complementary customer bases.

What we’ve done

Since 2013 we have completed 3 acquisitions, adding mortgage origination services to MCS to create a business able to operate across the whole mortgage lifecycle.

In addition, we have continued to expand with new customer wins and increased sales to existing customers, creating one of the leading businesses in the property services sector.

Further information

Date of investment: March 2010
Deal type: Private sale
Status: Unrealised

For further information, email:  mcs@tdrcapital.com
Visit the company’s website at:  mcs360.com