Wolters Kluwer Governance, Risk & Compliance (GRC) has inked an agreement to purchase eOriginal, a leading cloud-based digital lending software vendor. The amount of the deal is valued at approximately EUR 231 million in cash.

Acquisition details

The purchase deal expands GRC Compliance solutions’ leading status in US mortgage and loan document generation and analytics into a rapidly developing digital loan closing and storage contiguity.

eOriginal, a reputed name in digital lending technology, caters to over 650 customers in the US. The company serves a variety of industries ranging from banks, consumer lenders, mortgage lenders, and auto and equipment lenders.

What does the eOriginal platform have in store?

The eOriginal platform empowers lenders and their partners to build, store, and maintain digital assets from close to the secondary loan market. Since 2016, GRC’s Compliance Solutions and eOriginal have been in a strategic partnership that enables the integration of eOriginal’s electronic vaulting and closing software with Expere (centralized compliance document system).

The solutions offered by eOriginal and GRC Compliance Solutions are extremely compatible and have the caliber to develop an industry-leading end-to-end digital lending platform.

On the growth front, eOriginal expects to gain revenues worth approximately EUR 31 million in 2020 (the figure is unaudited), out of which about 95% is recurring and cloud-based in nature. Revenue growth of the firm has gained double-digit organic growth in the past three years.

The purchase is expected to deliver a return on invested capital (ROIC) beyond Wolters Kluwer’s after-tax weighted average cost of capital (WACC), i.e., 8% in the span of 3 to 5 years on fulfillment of immaterial impact on Wolters Kluwer adjusted earnings in the first complete year.

Completion of the transaction is subject to customary closing conditions and is expected before the end of 2020. The transaction will be effected through the purchase of eOriginal’s parent company, Paperless Transaction Management, Inc.

Based out of Baltimore, eOriginal was established in 1996, and as of today, it has about 100 employees. The solutions offerings include eAsset, ClosingCenter, and SmartSign.

The experts’ take

Steven Meirink, Executive Vice President and General Manager, Compliance Solutions, Wolters Kluwer GRC, said, “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.” He added, “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.”

Brian Madocks, CEO of eOriginal, said, “eOriginal is a leader in digital loan solutions with a proven track record of growth and customer adoption.” He added, “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.”

About Wolters Kluwer

Wolters Kluwer (WKL) headquartered in Alphen aan den Rijn, Netherlands, and Philadelphia, US, is a global leader in offering professional information, software solutions, and services for industries like healthcare, tax and accounting, governance, legal and regulatory sectors, and risk and compliance.

The company is involved in supporting customers in making critical decisions on a daily basis by delivering expert solutions that blend deep domain knowledge with specialized technology and services.

The  Wolters Kluwer group serves a huge client base in more than 180 countries across 40 countries with a workforce of approximately 19,000 people.

Shares of Wolter Kluwer are listed on Euronext Amsterdam (WKL) and are in the AEX and Euronext 100 indices.