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Cognizant Technology Solutions is to acquire CoreLogic India Operations, a captive unit of the US-based CoreLogic, for around $50 million. This will strengthen Cognizant's offering of end-to-end mortgage services, and also enable new business solution for mortgage industry.
4,000 India staff
CoreLogic India's 4,000 associates will become employees of Cognizant at the closing of the deal expected in August.
The India centre provides capabilities in software product development, analytical modelling, domain-centric back-office services, and technology support to CoreLogic and its customers, primarily in the US mortgage and real estate markets.
The Indian captive unit founded in 1994, has offices in Bangalore, Hyderabad, and Mangalore. The $1.6-billion CoreLogic headquartered in California has over 10,000 employees globally, according to a press release issued by Cognizant.
According to an agreement signed today in Bangalore, the purchase price will consist of a cash payment of approximately $50 million, plus adjustments for working capital and other charges or credits which will be determined at closing.
The agreement comes in with a minimum revenue commitment of $324 million, plus applicable inflation adjustments. This is over five years with various renewal and extension rights, under which Cognizant will provide a range of services to CoreLogic globally.
The two companies expect to provide end-to-end business process and analytics solutions across the mortgage value chain, from loan origination, escrow, title and closing services through secondary markets, loan administration, and loan default management.
As one of the largest real estate information and analytics provider in the US market, CoreLogic brings deep relationships in data, analytics, and business and information services capabilities. It has built a comprehensive US real estate, mortgage application, fraud and loan performance databases with public, contributory, and proprietary data covering nearly 99 per cent of US residential real estate property records; 80 per cent of mortgage applications, and 85 per cent of mortgage loan servicing performance information.
Growth strategy
Mr Francisco D'Souza, President and CEO, Cognizant said the acquisition continues the company's long-standing strategy of acquiring for capabilities. The relationship with CoreLogic enables Cognizant to better serve the rapidly evolving mortgage industry globally.
Commenting on the deal, Mr Joseph Walent, analyst at the US-based Technology Business Research, said it is similar to the purchase of UBS India Service Centre that expanded Cognizant's vertical-specific financial services BPO capabilities. The acquisition of the CoreLogic India-based service delivery operations will have much the same effect.
The acquisition aligns with Cognizant's growth strategy of expanding its capabilities into adjacent markets where it has established services. Further, the expertise acquired from CoreLogic will be able to be quickly disseminated across the company with the continued effective leverage of Cognizant's proprietary internal communications Web-based on social-networking architectures, known as Cognizant 2.0, he said.
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