Nasdaq-listed IT services firm Cognizant has struck a deal with NYSE-listed CoreLogic, a firm specialising in information, analytics and business services, to acquire CoreLogic Global Services Pvt Ltd (CoreLogic India) – the India-based captive operations of CoreLogic. The deal includes cash payment of $50 million plus adjustments for working capital and other charges or credits.
As part of the transaction, CoreLogic and Cognizant will enter into a services agreement with a minimum revenue commitment of $324 million and applicable inflation adjustments, over five years, with various renewal and extension rights, under which Cognizant will provide a range of services to CoreLogic globally.
The transaction is expected to close in August 2011.
Together, the 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 to secondary markets, loan administration and loan default management.
CoreLogic India, whose approximately 4,000 associates (a little less than half of CoreLogic’s total global employee base) will become employees of Cognizant after the deal is completed, provides capabilities in software product development, analytical modelling, domain-centric backoffice services and technology support to CoreLogic and its customers, primarily in the US mortgage and real estate markets. CoreLogic India, founded in 1994, maintains offices in Bangalore, Hyderabad and Mangalore.
Incidentally, CoreLogic is one of the largest real estate information and analytics providers in the US market. It has built proprietary data, covering approximately 99 per cent of the US residential real estate property records, 80 per cent of mortgage applications and 85 per cent of mortgage loan servicing performance information.
“Their deep capabilities in domain-centric backoffice services, software product development and analytical modelling, combined with Cognizant’s domain-aligned technology and business process expertise, will create greater value for our mutual financial services clients and enable the delivery of sophisticated analytics and next-generation business process solutions to market,” said Francisco D’Souza, president and CEO of Cognizant.
According to Anand Nallathambi, president and CEO of CoreLogic, “Establishing a strategic partnership with Cognizant will allow us to take advantage of increased global reach and technological capabilities, so that we can better deliver high-value, integrated workflow solutions to our customers.”
“We intend to use the cash proceeds towards our expansion into new growth markets and believe that Cognizant has the solid, proven track record that makes it an excellent choice to support this strategy,” he adds.