Compliance Solutions, a Minnesota-based division of Wolters Kluwer, has agreed to buy eOriginal, a provider of cloud-based digital lending software, for approximately $281 million in cash. Compliance Solutions has had a strategic partnership with eOriginal for the last four years.
Founded in 1996, Baltimore-based eOriginal has about 100 employees and serves more than 650 customers in the United State, including banks, mortgage lenders, consumer lenders, and auto and equipment finance lenders.
The company expects to have about $37 million in revenue this year, representing the third straight year of double-digit growth. The acquisition is expected to deliver a return on invested capital above Wolters Kluwer’s after tax weighted average cost of capital of 8 percent within 3 to 5 years from completion, expected by the end of the year. The deal is expected to have an immaterial impact on Wolters Kluwer adjusted earnings in the first full year.
“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,” said Steven Meirink, executive vice president and general manager, compliance solutions, Wolters Kluwer Governance, Risk & Compliance. “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.”