Private equity firm Renovo Capital LLC has taken a majority stake in RealtyTrac, and the co-founder of the foreclosure data company, James Saccacio, has stepped down as CEO, the companies announced today.
Brandon Moore, formerly the senior vice president and general manager of online marketing company One Technologies, has replaced Saccacio, who will continue to serve on RealtyTrac’s board of directors and as an advisor and spokesman for the company.
RealtyTrac said it had obtained a "substantial" but undisclosed capital investment from Renovo. As a result of the deal, RealtyTrac is now a new company, Renwood RealtyTrac.
Renovo Capital provided the funding through its Renwood Opportunities Fund, which is a "capital source for companies facing liquidity shortfalls and profitability challenges" and "makes control equity investments in troubled and underperforming companies," according to Renovo’s website.
RealtyTrac spokesman Daren Blomquist said he would not characterize RealtyTrac as a troubled company before the capital infusion.
"I would focus more on the opportunities (Renovo) saw in RealtyTrac as a company," Blomquist said. He said the deal has been in the works "for a few months."
In the fall of 2009, RealtyTrac laid off nearly 30 employees in an attempt to return to profitability. In September, former RealtyTrac senior vice president Rick Sharga left the company to serve as executive vice president at Carrington Mortgage Holdings.
Blomquist said the company’s finances have improved since the 2009 layoffs, and that Sharga’s departure was not related to Renovo’s investment in RealtyTrac.
"We had to make some tough decisions over the last couple of years to make sure the company continued to be strong. This (investment) was an opportunity to take RealtyTrac to the next level and go beyond just stabilizing to a growth mode," he said.
Renovo’s investment will allow RealtyTrac to focus on expanding its data collection capabilities and footprint while developing new products, the companies said.
Subscriptions to the company’s foreclosure data site are the company’s primary source of revenue, Blomquist said. The company also generates revenue from agent advertising on the site and "a growing part of our revenue is selling our data in bulk" to government entities, financial institutions, analysts, and individual real estate investors, he added.
Blomquist said the CEO change was "to create a fresh start for this new transition." Moore’s appointment is effective immediately. No other management changes are planned at this point, Blomquist said.
"I am excited to move forward with this venture as it will empower RealtyTrac to better serve its customers, providing them with a wider data reach, more robust foreclosure search and real estate research capabilities, and an enhanced user experience," Saccacio said in a statement.
The site’s end users and real estate professionals advertising on the site will not see major changes, Blomquist said.
"RealtyTrac is still here to provide the same services and products that we have been all along. However, we do think this is a great opportunity to improve and expand what we’ve been doing for end users," he said.