Wolters Kluwer Governance, Risk & Compliance (GRC) has signed an agreement with The Reynolds and Reynolds Co. to acquire International Document Services Inc. (IDS), a provider of compliance and document generation software solutions for the mortgage and real estate industry, for approximately $70 million in cash.
IDS will become an integral part of GRC’s Compliance Solutions business, a provider of compliance software for U.S. banks, lenders, credit unions, insurers and securities firms. 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 over 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. idsDoc is IDS’ cloud-based document preparation platform.
IDS is expected to generate revenues of approximately $15 million in 2022. Revenues are 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.
“IDS is well-positioned to take advantage of continuing digital adoption trends and has a strong track record of innovation in the mortgage industry,” says Steven Meirink, executive vice president and general manager of compliance solutions at 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.”
“Wolters Kluwer has a long and distinguished history of excellence and innovation, and we are truly excited to join this leading business,” comments 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.”