CALGARY, ALBERTA--(Marketwired - Dec. 14, 2016) - Founders Advantage Capital Corp. (TSX VENTURE:FCF) (the "Corporation" or "FA Capital") is pleased to announce that its subsidiary Dominion Lending Centres ("DLC") has entered into a letter of intent to acquire all of the securities of Marlborough Stirling Canada Limited ("MSC") for an aggregate purchase price of $5.5 million. The acquisition is expected to close on or about December 15, 2016. It is currently contemplated that the securities of MSC will be acquired by a new corporation ("Acquireco") which is 70% owned by DLC and 30% owned by a third-party. Funding to complete the acquisition will be provided by DLC and the third-party partner proportionate to their shareholdings in Acquireco. FA Capital owns a 60% interest in DLC.
MSC provides software and services to the Canadian mortgage lending industry under the following three product lines: MorWEB; Omiga; and Optimus. MorWEB offers web-based mortgage origination functionality designed specifically for mortgage brokers. Omiga is a multi-channel data capture software that allows for the processing of mortgage applications (including underwriting, risk assessment, offer production and funds disbursement). Optimus is a post-completion software service offering payment processing, reporting and arrears management, property tax management and securitization.
MSC is one of two providers that have been approved to provide a connectivity platform between Canadian lenders and mortgage brokers. In consideration for the MSC services, Canadian lenders pay MSC fees based on the funded volume of mortgages. To date, a single MSC competitor has dominated the lender connectivity marketplace and MSC has a small percentage of the marketplace. DLC anticipates it can increase MSC's market share by having more DLC mortgage brokers use the MSC platform.
Gary Mauris, President of DLC commented: "We believe this transaction is a significant step forward for the DLC group of companies. It provides us an additional origination delivery platform and allows us to have material influence on user experience, data management, and will easily allow us to add additional revenue streams under a central platform."
DLC group of companies is Canada's leading and largest mortgage brokerage with $33 billion in funded mortgages in 2015. DLC group of companies operates through three main subsidiaries, Dominion Lending Centres, Mortgage Centre Canada and Mortgage Architects and has operations in all 13 provinces and territories. DLC group of companies' extensive network includes over 5,000 agents, 325 franchises and 650 locations. Headquartered in British Columbia, DLC group of companies was founded in 2006 by Gary Mauris and Chris Kayat.
About Founders Advantage Capital Corp.
The Corporation is listed on the TSX Venture Exchange as an Investment Issuer (Tier 1) and employs a long-term investment approach. The Corporation has developed an investment approach to create long-term value for its shareholders and partner entrepreneurs (investees) by pursuing controlling interest acquisitions of cash flow positive, premium middle-market privately-held entities. The Corporation seeks to win mandates by appealing to the segment of the market which is not aligned with traditional private equity control, royalty monetizations or related structures. The Corporation's innovative platform offers disproportionate incentives (contractually) for growth in favour of our partner entrepreneurs. This unique platform is designed to appeal to entrepreneurs who believe in the growth of their businesses and who want the added ability to continue to manage the business with a long-term partner.
The Corporation's common shares are listed on the TSX Venture Exchange under the symbol "FCF".
For further information please refer to the Corporation's website at www.advantagecapital.ca.
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The foregoing list of risks is not exhaustive. For more information relating to risks, see the section titled "Risk Factors" in the Corporation's current annual information form. The forward-looking information contained in this document is made as of the date hereof and, except as required by applicable securities law, the Corporation undertakes no obligation to update publicly or revise any forward-looking statements or information, whether as a result of new information, future events or otherwise.