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Ellie Mae to be acquired by Thoma Bravo in deal valued at $3.7 billion

The tie-up is expected to be finalized during the second or third quarter of 2019
M&A lettering on messy desk
Shareholders will receive $99 per share, a 21% premium over Monday's closing price

Ellie Mae Inc (NYSE:ELLI), a cloud-computing software company that processes more than a third of US mortgage applications, has entered into a definitive agreement to be acquired by Thoma Bravo, a private equity firm. The all-cash agreement values Ellie Mae at about $3.7 billion.

The news sent Ellie Mae shares surging 21% morning trading Tuesday, to $99.44.

Shareholders will receive $99 per share, a 21% premium over Monday's closing price and a 47% premium over the stock's 30-day average. Over the past year, shares of the Pheaston, California, company have fallen 5.3%.

The deal includes a 35-day “go-shop” period during which Ellie Mae can seek superior bids from other companies.

Ellie Mae’s board of directors unanimously approved the agreement. The tie-up is expected to be finalized during the second or third quarter of 2019.

The company recently lost a third of its value following a disappointing third-quarter earnings report in October, but shares rebounded by 20% in January after Federal Reserve Chairman Jerome Powell said that the Fed will be patient in raising interest rates.

Continued low-interest rates could bring potential homebuyers into the market, meaning more mortgages for Ellie Mae.

--Written by Andrew Kessel

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