Kansas City-based Novation Companies Inc. on Thursday announced the sale of a subsidiary that provides appraisal management services to banks and mortgage lenders to Assurant Inc. for $60 million plus other considerations.
Novation, formerly known as NovaStar Financial, sold its StreetLinks LLC appraisal company based in Indianapolis. The sale includes a possible $12 million additional payout based on StreetLink’s future performance.
StreetLinks generates more than $140 million in annual fee income and is considered one of the nation’s largest independent appraisal management companies. Assurant said StreetLinks will retain its name and there are no plans to move operations, which include a service center in Tampa, Fla.
Novation, which owns 88 percent of StreetLinks, will use the proceeds from the sale to increase its investment in its computer cloud-based communications software subsidiary, CorvisaCloud LLC, and for general corporate purposes.
“The sale of StreetLinks is a significant strategic shift for Novation,” said Lance Anderson, chief executive of Novation.
Novation changed its name from NovaStar about two years ago as it stepped further away from its days as a subprime mortgage lender. The subprime mortgage industry collapsed with the decline in the housing industry and the onset of the financial crisis in late 2007.
At the time of the name change, Novation said the switch reflected the company's move from a mortgage lender to a collection of businesses. Novation, which is publicly traded, also owns Advent Financial Services Inc.
“Novation’s strategy of investing in a variety of early-stage operating businesses was designed to find a business that would generate sufficient earnings … to rebuild shareholder value,” Anderson said.
New York-based Assurant is seeking to diversify revenue of its specialty insurance businesses.
“This acquisition is a natural extension” for Assurant Specialty Property, said Gene Mergelmeyer, the chief executive officer of the Assurant unit. “We are a leader in insurance, preservation and other services for the mortgage industry, and StreetLinks is a leader in valuation solutions and technologies used by lenders and appraisers nationwide.”
Assurant is also the parent company of Assurant Employee Benefits, which is headquartered on Grand Boulevard near Crown Center.