Wolters Kluwer’s Governance, Risk & Compliance (GRC) Division has signed an agreement to acquire eOriginal, a leading provider of cloud-based digital lending software, for approximately €231 million in cash.  According to a statement, “the acquisition extends 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.”

eOriginal was founded in 1996, is based in Baltimore, Maryland, and has approximately 100 employees. Its solutions include eAsset®, SmartSign® and ClosingCenter™. The digital lending technology company has more than 650 customers in the U.S., including banks, mortgage lenders, consumer lenders, and auto and equipment finance lenders. Its platform enables lenders and their partners to create, store and manage digital assets from close through to the secondary loan market. GRC’s Compliance Solutions business has had a strategic partnership with eOriginal since 2016, which allows the integration of eOriginal’s electronic vaulting and closing software with GRC’s Expere solution. “The offerings of eOriginal and GRC Compliance Solutions are highly complementary and together will form an industry leading end-to-end digital lending platform,” Wolters Kluwer said in the statement.

“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 GRC. “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.”

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

eOriginal expects to achieve revenues of approximately €31 million in 2020 (unaudited), of which almost 95% is recurring and cloud-based in nature. Revenues have grown at a double-digit organic growth rate in the last three years. Wolters Kluwer says the acquisition is expected to deliver a return on invested capital (ROIC) above its after tax weighted average cost of capital (WACC) of 8% within 3 to 5 years from completion and is expected to have an immaterial impact on Wolters Kluwer adjusted earnings in the first full year.

Wolters Kluwer GRC’s Global Corporate Communications Director confirmed that completion of the transaction is subject to customary closing conditions and “expected before the end of 2020.” The transaction will be effected through the purchase of eOriginal’s parent company, Paperless Transaction Management, Inc., he added.

Wolters Kluwer Compliance Solutions is a provider of risk management and regulatory compliance solutions and services to U.S. banks and credit unions, insurers and securities firms. The business, helps these financial institutions efficiently manage compliance obligations tied to loan and deposit origination transactions and workflows, manage risk and other regulatory compliance obligations, and gain the insights needed to focus on better serving their customers and growing their business.

The acquisition news follows an exceptional busy and successful year for Wolters Kluwer’s Compliance Solutions business, led globally by Steven Meirink. As well as securing more than 40 awards for its excellence and innovation, the company’s Paycheck Protection Program (PPP) Supported by TSoftPlus™ financial technology solution has helped small businesses retain approximately one million American jobs during the Covid-19 pandemic. And that’s across almost 100 different industries. The data demonstrates how the business, through its expert solutions, has had a major impact at a national level, aiding small businesses obtain critical funding.

Minneapolis-based Meirink is responsible for overseeing the P&L, operations, and growth strategy for Compliance Solutions. Prior to joining Wolters Kluwer, he was senior vice president and general manager for Assurant Mortgage Solutions, where he was responsible for driving the growth of new solutions and expanding Assurant’s business into emerging market areas. He also held several senior level positions within Equifax, including vice president and general manager of the company’s United States Consumer Information Services – Mortgage Growth Initiatives portfolio. Prior to Equifax, Meirink held several leadership positions throughout the financial services industry including community banking, mortgage lending, insurance, and consumer credit. Meirink reports into New York-based CEO of Wolters Kluwer’s GRC Division, Richard Flynn.