Wilmington-based cloud banking software firm nCino Inc. plans to buy a digital mortgage platform in a transaction valued at $1.2 billion, according to an announcement Tuesday.
nCino (Nasdaq: NCNO) has entered into a definitive agreement to acquire SimpleNexus for about $240 million in cash and 13.2 million shares of nCino common stock, a news release stated.
The transaction is expected to close by the end of nCino’s fourth fiscal quarter, Jan. 31, and is subject to regulatory approvals and other closing conditions.
“When we first started nCino, our mission was clear: to transform the financial services industry through innovation, reputation and speed. Today, we take another major step forward in executing on that mission by welcoming the talented team at SimpleNexus and their best-in-class, cloud-based homeownership platform into the nCino family,” said Pierre Naudé, CEO of nCino, in a release. “Just as nCino has transformed the process for commercial, small business and retail lending, treasury management and account opening, SimpleNexus has streamlined the many stages of the homeownership process into a single, seamless journey.
"Their innovative solution and deep subject matter expertise in consumer front-end technology will extend our capabilities to the U.S. point-of-sale mortgage space and enhance nCino’s mobile and point-of-sale offerings, unlocking additional opportunities and value for our customers and their clients.”
SimpleNexus serves more than 300 independent mortgage banks (IMBs), over 80 banks and credit unions and more than 41,000 loan originators nationwide. During the first nine months of 2021, more than 1 in every 7 mortgage originations in the U.S. leveraged SimpleNexus’ software, the release stated.
"The acquisition of SimpleNexus initially expands nCino’s serviceable addressable market by over $4 billion and furthers its competitive position as the single digital banking platform of choice," according to the release.
While nCino's portfolio of software products - all part of its basic Bank Operating System - has grown to include both lending and deposit functions for financial institutions of all sizes, this purchase gives nCino access to a whole new market: the various participants in retail mortgage lending. The fact that the platform is mobile and user-focused "enables loan officers, borrowers, real estate agents and settlement agents to manage the homeownership journey in the palm of their hands," the release stated.
nCino and SimpleNexus will work together to continue innovating for the IMB community while accelerating the adoption of the SimpleNexus homeownership platform by U.S. banks and credit unions, where nCino currently has more than 1,100 customers, according to the release.
The two companies are also expected to work together to leverage SimpleNexus’ consumer front-end technology and domain expertise to accelerate the development of nCino’s mobile and point-of-sale offerings across additional lines of business.
“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," SimpleNexus CEO Cathleen Schreiner Gates said. "Together, our best-in-class, cloud native platforms will significantly strengthen how we serve our customers.”