Real estate investor Greenfield Partners L.L.C. launched a buyout of Clayton Holdings Inc., following the collapse of the Shelton company”™s business analyzing subprime mortgage packaged as securities.
Norwalk-based Greenfield Partners, a private-equity fund that usually invests in real estate deals, offered to pay $134 million for Clayton, a third more than the average price of its shares over the preceding month. Under the acquisition agreement, Clayton is not allowed to seek out other offers but its board can evaluate any unsolicited bids. Clayton would have to pay Greenfield Partners $6.7 million to terminate the agreement in favor of another; Greenfield can buy out the merger agreement for a $9 million penalty.
Greenfield Partners was founded in March 1997 by Eugene Gorab, who previously ran resort development at Greenwich-based Starwood Capital Group L.L.C. In December, Greenfield Partners inked investor commitments for two new funds, one valued at $1 billion and the other $400 million.
The fund is acquiring Clayton for $6 per share; 14 months ago, the company”™s shares traded at nearly $24. Clayton”™s largest shareholder is Boston-based TA Associates Inc., which holds a 37 percent stake.
Following the collapse of the subprime mortgage market last year, Clayton reported a $97 million loss on $153 million in revenue, with sales off 34 percent from 2006. Late last year, the company agreed to cooperate with a probe of the subprime mortgage industry by New York Attorney General Andrew Cuomo, including providing testimony or documents related to its clients.
In late February, Clayton Holdings hired KPMG L.L.P. as its auditor, replacing Grant Thornton L.L.P.
Stephen Lamando founded Clayton Holdings in 1990 as Clayton Services, having previously worked in residential “whole loan” trading at Goldman Sachs & Co. In 2004, Lamando sold a controlling stake to TA Associates, which combined the company with Colorado-based Murrayhill Co. and First Madison Services Inc.
In 2005 Clayton Holdings hired Frank Filipps as CEO, who previously was CEO of Radian Group Inc. In 2006, Clayton Holdings held an initial public offering of stock.
As of December, Clayton Holdings had 415 employees, down 175 from a year earlier; and 1,400 independent contractors who review loan portfolios, down more than 500.
In its annual report filed in late March, the company indicated it is planning additional cuts. In late February, Clayton Holdings canceled a lease to one of two floors it uses at 2 Corporate Drive in Shelton, paying landlord R.D. Scinto Inc. $500,000 to terminate the contract and recording a $430,000 charge for renovations it had undertaken.
At last report, the company had 150 local employees.
“This transaction ”¦ provides a significant premium to our shareholders during a period of unprecedented difficulty and great uncertainty in the markets that we serve,” Filipps said, in a written statement following the acquisition agreement. “The transaction will strengthen our balance sheet and allow us to continue to invest in European operations and in the development of products and services that will deliver the greater transparency and predictive solutions that the market will require.”
