Original Founder Dan Gilbert Leads Group Buying Quicken Loans & Rock Financial back from Intuit
With over 1000 southeast Michigan employees and $4.6 Billion in 2001 mortgage volume, Quicken Loans will be the largest Michigan-based business-to-consumer Internet company
MOUNTAIN VIEW, Calif. - June 20, 2002 - 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), which Intuit acquired in December 1999.
When the transaction closes, 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. The new company will be based in Livonia, making it the largest Michigan-based Business to Consumer Internet company.
Intuit will remain a small minority shareholder in the new entity, and will continue to offer Quicken Loans products and services on Quicken.com and through Quicken and Turbo Tax software.
A Leader in Direct-to-Consumer Home Loans
Quicken Loans offers mortgages in all 50 states on the Internet through Quickenloans.com and through three Rock Financial branches located in southeastern Michigan. Quicken Loans closed $4.6 billion in home loans in calendar year 2001 and generated revenue of approximately $172 million. The company is now the 23rd largest retail mortgage lender in the country (from among some 35,000 lending entities), and is the leading online lender. Forbes Magazine recently named QuickenLoans.com its "Forbes Favorite" mortgage website for the second consecutive year and the site also has received "Best of the Web" accolades from Money and PC Magazine. The Rock Financial mega-branches in southeast Michigan are the highest producing mortgage branches in the state.
Gilbert will serve as chairman of the new holding company, which has not yet been named. Bill Emerson, chief executive officer of Quicken Loans, will serve as chief executive officer. Patrick McInnis, president of Quicken Loans, will be the president. Jeff Eisenshtadt will continue as chief executive officer of Title Source Inc. (also part of this transaction), which provides title insurance and settlement services nationally. Emerson and McInnis also will participate with Gilbert as investors in the new company, which will retain all of the 1,000 Quicken Loans, Rock Financial and Title Source employees.
Dan Gilbert founded Quicken Loans predecessor Rock Financial in 1985. Rock Financial grew into one of the largest independent mortgage banks in the country and in May 1998, Gilbert took the company public. Initially a brick-and-mortar lender, the company launched Rockloans.com in January 1999, and quickly positioned itself as one of the fastest-growing direct mortgage lenders on the Internet. In December 1999, Intuit purchased Rock Financial, renaming the company Quicken Loans Inc.
Sale of Quicken Loans Better Aligns Business Portfolio to Drive Growth
"Quicken Loans is a great business and has produced strong results for Intuit over the last two fiscal years," said Bennett. "They have outstanding products and services and an experienced and talented management team, but the business is no longer a good strategic fit for Intuit."
Over the past two years, Intuit has made a number of moves to realign its business portfolio. Intuit has exited two other non-strategic consumer e-businesses – online insurance and online bill management. At the same time, Intuit has moved aggressively to execute its "Right for My Business" small business strategy and to expand its tax business.
In fiscal 2002, Intuit has made three acquisitions and announced a fourth to execute its "Right for My Business" strategy to penetrate the large, under-served small business markets both through new QuickBooks products and services as well as acquisitions to drive new growth platforms. It has acquired two companies that provide business management solutions for specific vertical industries - OMware, Inc., which provides solutions for the construction industry, and American Fundware, which provides business management software solutions to public sector organizations. Earlier this month, Intuit announced a third such acquisition, Management Reports, Inc., which provides business management software solutions for commercial and residential property managers. In early June, Intuit also acquired CBS Payroll, which provides a full-service outsourced payroll solution, as part of its strategy to serve larger small businesses and provide solutions beyond accounting.
In April 2001, Intuit acquired Tax and Accounting Software Solutions, which helped drive strong growth in Intui'’s professional tax business in fiscal 2002.
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