Wolters Kluwer Governance, Risk & Compliance (GRC) has signed an agreement to acquire eOriginal, a leading provider of cloud-based digital lending software, for approximately $280 million in cash.
The acquisition extends GRC Compliance Solutions’ leading position in U.S. mortgage and loan document generation and analytics into the fast-growing digital loan closing and storage adjacency.
eOriginal is a trusted leader in digital lending technology, serving more than 650 customers in the U.S., including banks, mortgage lenders, consumer lenders, and auto and equipment finance lenders. The eOriginal platform enables lenders and their partners to create, store and manage digital assets from close through to the secondary loan market. GRC’s Compliance Solutions business has had a strategic partnership with eOriginal since 2016, which allows the integration of eOriginal’s electronic vaulting and closing software with Expere. The offerings of eOriginal and GRC Compliance Solutions are highly complementary and together will form an industry leading end-to-end digital lending platform.
eOriginal expects to achieve revenues of approximately $37.6 million in 2020 (unaudited), of which almost 95 percent is recurring and cloud-based in nature. Revenues have grown at a double-digit organic growth rate in the last three years. The acquisition is expected to deliver a return on invested capital (ROIC) above Wolters Kluwer’s after-tax weighted average cost of capital (WACC) of 8 percent within three to five years from completion and is expected to have an immaterial impact on Wolters Kluwer adjusted earnings in the first full year. Completion of the transaction is subject to customary closing conditions and expected before the end of 2020. The transaction will be effected through the purchase of eOriginal’s parent company, Paperless Transaction Management, Inc.
eOriginal was founded in 1996, is based in Baltimore, MD, and has approximately 100 employees. Its solutions include eAsset, SmartSign and ClosingCenter.
“Borrower preferences, competition among lenders, and changing regulations are driving increased digitization of the lending workflow. eOriginal is well-positioned to take advantage of these systemic trends,” said Steven Meirink, Executive Vice President and General Manager, Compliance Solutions, Wolters Kluwer GRC. “The acquisition positions us as the leading provider of digital lending solutions, spanning all workflows from loan approval, to document preparation and closing, with compliance certainty.”
“eOriginal is a leader in digital loan solutions with a proven track record of growth and customer adoption,” added Brian Madocks, CEO of eOriginal. “Digital lending continues to grow across all industries. Customers want and need purpose-built digital solutions that are complete and compliant. The combination of eOriginal and Wolters Kluwer provides exactly that – the right solution, in the right market, at the right time.”