A unit of international consulting firm Wolters Kluwer is buying mortgage technology company International Document Services from Reynolds and Reynolds for $70 million in cash.
After the deal is completed, IDS will become a part of Wolters Kluwer Governance, Risk & Compliance’s compliance solutions business, whose other units include digital signature and asset management software provider eOriginal.
This transaction comes at a time when the financial benefits of various forms of electronic closings has been quantified, but it still remains a small portion of the market.
Wolters Kluwer has no plans to rename IDS once the deal is closed. “The IDS brand is highly valued and Wolters Kluwer will keep the name within our wider Wolters Kluwer Compliance Solutions product suite,” said Paul Lyon, global corporate communications director for Wolters Kluwer GRC.
IDS is headquartered in Draper, Utah, and was founded in 1986, making it one of the older mortgage technology companies in operation. The company has 75 employees and over 450 clients.
“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, Wolters Kluwer executive vice president and general manager, Compliance Solutions, Wolters Kluwer GRC, in a press release.
Reynolds and Reynolds acquired IDS in October 2015 for an undisclosed purchase price. The following September, IDS purchased Encomia, which had its own platform for electronic loan applications and closings, plus electronic document storage (eVault) and signature capture.
IDS is expected to generate approximately $15 million in revenue during 2022, based on transactional pricing linked to mortgage volumes.
As a result, the acquisition is expected to deliver a return on invested capital above Wolters Kluwer’s 8% after-tax weighted average cost of capital within 3 to 5 years of the expected completion date in the second quarter of this year.