Deal furthers company's 'transformation' toward becoming an expert solutions firm
Wolters Kluwer Governance, Risk & Compliance, has signed an agreement with The Reynolds and Reynolds Co. to acquire International Document Services, Inc. in a deal valued at some $70 million.
International Document Services (IDS) is a US provider of compliance and document generation software solutions for the mortgage and real estate industry. Wolters Kluwer’s GRC division derives much of its revenue in the US, having posted revenue of more than $1.1 billion last year, with 88% of that coming from North America, 10% in Europe and 2% in Asia Pacific.
In a telephone interview with Mortgage Professional America, Wolter Kluwer spokesman Paul Lyon said the deal furthers the company’s goal – what he called a “transformational journey” of becoming an expert solutions company.
“We create value for our customers by providing solutions that combine deep domain knowledge with advanced technology and services to deliver better outcomes, analytics and improved productivity,” the UK-based spokesman said. “IDS, meanwhile, is a fast-growing, high-quality provider of compliance and document management software solutions for the mortgage industry, with a proven track record of growth and customer adoption. This is a smart strategic fit.”
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As a result of the transaction, IDS will become “…an integral part: of GRC’s Compliance Solutions business, a leading provider of compliance software for US banks, lenders, credit unions, insurers, and securities firms, Lyon said. The acquisition builds on GRC’s existing leadership in digital loan compliance, with end-to-end capabilities spanning from document generation to eClosing, loan analytics and lien solutions, he added.
“At the end of the day, our products are highly complementary,” Lyon told MPA. “There’s a strong cultural alignment there. It really does reinforce Wolter Kluwer Compliance Solutions’ position as the leading provider of loan compliance solutions. We were after the broader set of capabilities in the marketplace and ultimately, through this acquisition, we share a common vision of offering compliant document generation and, for that matter, additional lending solutions.”
He pointed to the company’s earlier acquisition of eOriginal in December 2020 as further evidence of Wolter Kluwer’s quest to become an expert solutions company. “We create value for our customers by providing solutions that combine deep domain knowledge with advanced technology and services to deliver better outcomes, analytics and improved productivity,” he said. “IDS, meanwhile, is a fast-growing, high-quality provider of compliance and document management software solutions for the mortgage industry, with a proven track record of growth and customer adoption. This is a smart strategic fit.”
The company eOriginal is a leader in digital lending technology, serving more than 650 customers in the US, including banks, mortgage lenders and consumer lenders. The eOriginal platform enables lenders and their partners to create, store and manage digital assets from close through to the secondary loan market.
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But back to the IDS acquisition: “IDS is a leading provider in this space,” Lyon reiterated. “It’s got more than 450 clients in this space. It’s got a strong pedigree founded in 1986. It really sort of puts us into that position with these signatures closing documents and full disclosures, etc., etc. to actually work alongside the compliance solutions products to really position us strongly in this space.”
Wolter Kluwer Compliance Solutions, run globally by EVP and GM Steve Meirink, is a market leader and trusted provider of risk management and regulatory compliance solutions and services to US banks and credit unions, insurers and securities firms, according to company literature. The business, which sits within Wolters Kluwer’s Governance, Risk & Compliance (GRC) division, helps these financial institutions efficiently manage risk and regulatory compliance obligations, and gain the insights needed to focus on better serving their customers and growing their business.
For its part, IDS serves over 450 clients, including US mortgage lenders, banks and law firms. The company’s services include initial disclosures, electronic signatures, closing documents, and document fulfillment. The IDS flagship document preparation solution, idsDoc, is a cloud-based platform that is recognized across the industry for its superior capabilities, customer service, and integrations with many of the leading loan origination systems and eClosing platforms.
IDS, founded in 1986 and based in Draper, Utah, employs approximately 75 professionals. The company is expected to generate revenues of approximately $15 million in 2022, the company said, adding that revenues are based on transactional pricing linked to mortgage volumes. The acquisition is expected to deliver a return on invested capital (ROIC) above Wolter Kluwer’s after tax weighted average cost of capital (8%) within three to five years from completion, the company added. Moreover, the acquisition is expected to have a positive but immaterial impact on Wolter Kluwer’s adjusted earnings in the first full year, the acquiring company said. Completion of the transaction is subject to customary closing conditions and is expected in the second quarter of 2022.
“IDS is well-positioned to take advantage of continuing digital adoption trends and has a strong track record of innovation in the mortgage industry,” Meirink said in a prepared statement. “This strategic and exciting acquisition will further solidify Wolter Kluwer’s market leadership in expert solutions for loan compliance and, alongside our eOriginal product suite, positions us as the leading provider of digital lending solutions.”
Added IDS general manager Mark Mackey: “Wolter Kluwer has a long and distinguished history of excellence and innovation, and we are truly excited to join this leading business. This is the perfect combination that will bring the next level of capabilities to our clients and the lending market.”
