The deal is expected to help in the expansion of nCino’s capabilities to the US point-of-sale mortgage market
Cloud banking solutions provider nCino has signed an agreement to acquire SimpleNexus in a stock and cash deal worth approximately $1.2bn.
Founded in 2011, SimpleNexus is a digital homeownership software company in the US, serving over 300 independent mortgage banks (IMBs) and more than 80 banks and credit unions.
The mobile-first technology developer also serves more than 41,000 loan originators nationwide in the US.
SimpleNexus claims that its software was leveraged by more than one in every seven mortgage originations in the country during the January-September period.
The company operates a per-seat subscription-based revenue model, which is similar to that of nCino, for financial results that are predictable, recurring and not based on mortgage transaction volumes.
The acquisition is expected to help in the expansion of nCino’s capabilities to the US point-of-sale mortgage market.
Apart from strengthening the competitiveness of nCino’s digital banking platform, the acquisition is said to increase nCino’s serviceable addressable market by over $4bn.
SimpleNexus CEO Cathleen Schreiner Gates said: “Our industry-leading, mobile-first homeownership platform will complement nCino’s Bank Operating System to create even greater value for IMBs and financial institutions across multiple product lines and digital channels. Together, our best-in-class, cloud-native platforms will significantly strengthen how we serve our customers.”
The two companies intend to work together in developing innovative solutions for the IMB community and speeding up the adoption of SimpleNexus’ homeownership platform by US banks and credit unions.
They are also expected to partner in the development of nCino’s mobile and point-of-sale offerings across additional lines of business, by SimpleNexus’ consumer front-end technology and domain expertise.
nCino will pay nearly $240m in cash and approximately 13.2 million shares of its common stock for the acquisition of SimpleNexus.
The transaction is expected to be completed close by the end of nCino’s fourth fiscal quarter ending 31 January 2022.
It is subject to receipt of regulatory approvals and other customary closing conditions.
BofA Securities is acting as financial advisor to nCino in connection with the transaction, while Sidley Austin is serving as its legal counsel.