North Carolina-based fintech firm nCino has reached a deal to acquire mortgage tech vendor SimpleNexus for $1.2 billion, the company said in a statement late Tuesday afternoon.
The sum entails a $240 million cash payment and approximately 13.2 million shares of nCino common stock, nCino said.
nCino, a publicly traded financial tech company that specializes in cloud banking, said that its decision to purchase Utah-based SimpleNexus is a natural expansion of the company into the point-of-sale mortgage market. The transaction will broaden nCino’s serviceable addressable market by over $4 billion.
Additionally, nCino noted that SimpleNexus operates a “per-seat subscription-based revenue model, enabling the company to generate financial results that are more predictable, recurring and not based on mortgage transaction volumes.”
SimpleNexus, founded in 2011, is a homeownership platform that streamlines the mortgage experience for more than 300 independent mortgage banks, over 80 depository banks and credit unions, and more than 41,000 loan originators nationwide.
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The tech company has a solid footing in the mortgage market, with the platform reporting that during the first nine months of 2021 it was used in every one out of seven mortgage transactions in the nation.
In October, the SimpleNexus notably acquired LBA Ware, a software firm that offers incentive compensation management and business intelligence software for the mortgage industry.
Pierre Naudé, CEO of nCino, said in a statement that SimpleNexus’ “innovative solution and deep subject matter expertise in consumer front-end technology will extend [nCino’s] capabilities.”
The firm, whose clients’ assets range in size from $30 million to more than $2 trillion, plans to work with the tech vendor to “continue innovating for the IMB community while accelerating the adopting of the SimpleNexus homeownership platform by U.S. banks and credit unions, where nCino currently has over 1,100 customers.”
Additionally, SimpleNexus’ technology will be leveraged “to accelerate the development of nCino’s mobile and point-of-sale offerings across additional lines of business,” the firm said.
The transaction is expected to close by the end the fourth quarter and is subject to receipt of regulatory approvals and other customary closing conditions.
nCino made two acquisitions in 2019, gobbling up Visible Equity, a financial analytics and compliance software firm, and Finsuite, a developer of optical character recognition process automation software.