Bangalore: Information technology (IT) services company Cognizant is to acquire CoreLogic Global Services Pvt. Ltd (CoreLogic India) for $50 million in cash to expand its mortgage services portfolio.
The unit being bought houses the India-based captive operations of CoreLogic, a provider of information and analytics services in the financial and property services space. The deal also includes adjustments for working capital and other charges or credits which will be determined at the closing of the deal, expected by August.
Nasdaq-listed Cognizant is expected to overtake Wipro Ltd and thus become India’s third largest IT services company. While Wipro reported revenue of $1.408 billion for the April-June quarter, Cognizant, in its guidance in April for the same quarter, had projected a revenue of $1.450 billion.
As part of the transaction, CoreLogic and Cognizant will enter into a services agreement with a minimum revenue commitment of $324 million, plus applicable inflation adjustments, over five years, with various renewal and extension rights. Under this, Cognizant will provide a range of services to CoreLogic globally, a joint statement from the two companies said on Tuesday.
Together, the companies aim 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.
CoreLogic India employs about 4,000 people, who will become employees of Cognizant when the deal is completed. The unit was founded in 1994 and has offices in Bangalore, Hyderabad, and Mangalore.
Headquartered in Santa Ana, California, CoreLogic has more than 10,000 employees globally with 2010 revenues of $1.6 billion. Its customers are mainly in the US mortgage and real estate markets.
Corelogic has built up a comprehensive database on US real estate, mortgage applications, fraud and loan performance databases with public, contributory and proprietary data covering approximately 99% of US residential real estate property records, 80% of mortgage applications and 85% of mortgage loan servicing performance information, the statement said.
“CoreLogic India’s capabilities in domain-centric back-office services, software product development, and analytical modeling, 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.
Anand Nallathambi, president and CEO of CoreLogic, said, “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,” he added.
Cognizant has 50 delivery centers worldwide and approximately 111,000 employees as of March 31, 2011, with annual revenues of $ 4.5 billion.