Wolters Kluwer GRC to acquire IDS

Wolters Kluwer’s Governance, Risk & Compliance (GRC) division, which recently reported revenues in excess of $1.1 billion for 2021, has signed an agreement with The Reynolds and Reynolds Company to acquire International Document Services, Inc. (IDS). The company is a leading U.S. provider of compliance and document generation software solutions for the mortgage and real estate industry and Wolters Kluwer is acquiring it for approximately $70 million in cash.

According to a statement “IDS will become an integral part of GRC’s Compliance Solutions business, a leading provider of compliance software for U.S. banks, lenders, credit unions, insurers, and securities firms”. The company adds that “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.”

IDS serves more than 450 clients, including U.S. 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 is well-positioned to take advantage of continuing digital adoption trends and has a strong track record of innovation in the mortgage industry,” said Steven Meirink, Executive Vice President and General Manager, Compliance Solutions, Wolters Kluwer GRC. “This strategic and exciting acquisition will further solidify Wolters 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.”

IDS, founded in 1986 and based in Draper, Utah, employs approximately 75 professionals. Wolters Kluwer said the company is expected to generate revenues of approximately $15 million in 2022, with revenues based on transactional pricing linked to mortgage volumes. The acquisition is expected to deliver a return on invested capital (ROIC) above Wolters Kluwer’s after tax weighted average cost of capital (8%) within 3 to 5 years from completion. “The acquisition is expected to have a positive but immaterial impact on Wolters Kluwer adjusted earnings in the first full year. Completion of the transaction is subject to customary closing conditions and is expected in the second quarter of 2022,” the company added.

The acquisition is the second for Wolters Kluwer in the past 15 months. In December 2020, as widely reported at the time, the company acquired eOriginal, a leading provider of cloud-based digital lending software, for approximately €231 million in cash. The acquisition extended 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.

The eOriginal product suite serves 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. Under Wolters Kluwer’s ownership eOriginal has, notably, won a number of major awards in the past year.

Corporate Vision magazine, for example, named Wolters Kluwer eOriginal as “Best End-to-End Digital Lending Platform” in its 2021 Technology Innovator Awards for innovative use of technology. And Wealth & Finance International magazine named eOriginal “2021 End-to-End Digital Lending Platform of the Year” as part of its highly competitive FinTech Awards series, where judges decide winners based on evidence of “excellence and innovation.” Acquisition International, meanwhile, honored Wolters Kluwer Compliance Solutions with its 2021 “Financial Technology Acquisition of the Year” accolade, part of the magazine’s 8th Annual Business Excellence Awards.

“Wolters Kluwer has a long and distinguished history of excellence and innovation, and we are truly excited to join this leading business,” commented Mark Mackey, General Manager of IDS. “This is the perfect combination that will bring the next level of capabilities to our clients and the lending market.”

Paul Lyon, Global Director of Corporate Communications for Wolters Kluwer GRC added: “By acquiring a leading, innovative and multi award-winning company with a highly satisfied customer base we are able to quickly increase our market penetration and focus our efforts on driving adoption and serving customer needs with continued innovation and market validated product bundling. This is all in pursuit of reinforcing our position as the leading provider of loan compliance solutions.”