Blend Labs, Inc., a digital lending platform, announced on Monday, 15th March 2021, that it would acquire the Title365 brand. This deal with Mr. Cooper Inc. is expected to close during the second quarter of 2021, subject to customary conditions and the US Security and Exchanges Commission (SEC) approval.
As per this definitive agreement signed between both companies, Blend Labs, Inc. will pay approximately $422 million to Mr. Cooper Inc. for the title agent and technology business. It will reflect an enterprise value of $500 million, less $31 million in adjustment approximation. Also, Mr. Cooper Inc. will have 9.9% ownership interest retained as part of the Title365 acquisition.
The financial technology company, Blend Labs, Inc., was founded in 2012 in San Francisco, USA. It launched its homeowner insurance offers in 2018 and digital closing solution in 2020 to provide customers home buying options on its ever-developing single cloud-based platform.
Blend Labs, Inc. uses data integration software to help lenders and take the financial details of borrowers to reduce their mortgage application wait times. It has worked with Nationwide Mortgage Bankers, First Horizon Bank, Wells Fargo, US Bank, etc., over the years.
Meanwhile, Mr. Cooper Inc., formerly known as Nationstar Mortgage Holdings Inc. got established in 1994 in Dallas, USA. It provides quality servicing, origination, transaction based-services, and data-enhanced solutions to single-family residences under their brands Mr. Cooper and Xome. This company is one of the largest home loan service providers that went public at the New York Stock Exchange in 2012.
Title365 is a title insurance and settlement services provider launched in 2009. It has delivered top-notch technology solutions as per the rapidly changing demands of the industry for a long time. With that, there has been a faster turnaround of title, escrow, and default services in the market for mortgage servicers and lenders.
The main aim for this acquisition is to use the technology platform of Blend Labs, Inc., and the operational expertise of Title365. It will help financial institutions in having efficient engagement with the customers during their home buying journey. Upon completing this deal, Mr. Cooper Inc. expects to have a profit of around $350 million post tax. Also, they are hoping to receive cash proceeds of approx $400 million which is net of transaction costs and cash taxes.