Capital Mortgage Insurance Corporation

MIB Spring Term Prof. Pai

Capital Mortgage Insurance Corporation

Adelina Choukerova

Capital Mortgage Insurance Corporation

This document analyzes the Capital Mortgage Insurance Corporation (CMI) and their plan and strategy for acquisition of Corporate Transfer Services (CTS). CMI is a wholly owned subsidiary of Northwest Equipment Corporation, who is a major freight transporter of railcars, commercial aircraft and other industrial equipment. The company was established to sell mortgage guaranty insurance policies to residential mortgage lenders throughout the United States. The company after its establishment has faced a 14.8% market share which was dropping through the years. Frank Randall was the first and only president of the company and Dolan the senior vice president and treasurer. This document explains the residential real estate industry and its role in property transactions. CMI during many years have driven a small portion of their efforts towards real estate brokers. Their activities had a wide range from offering educational programs to many others. In 1979 large national corporations began to acquire real estate agencies and CMI saw a chance to increase the range of it business. Both presidents of CMI saw a unique chance in the acquisition to build CMI into a bigger and diversified company. With their primary mortgage insurance business they had a stable financial position. In this document we can see that in the early 1978 Franck Randall began to search for matching acquisition opportunities. The analysis shows that he contacted the director of the Metropolitan Realty Network which offered a small independent firm in Chicago called Corporate Transfer Services, Inc. (CTS). This company previously had been established to work with MetroNet brokers but couldn’t meet the MetroNet’s expectations. When analyzing the document it comes clear that Randall and Dolan were certain if they should put CMI into the employee relocation services...