*_Correction: The previous article held that Ellie Mae makes an estimated 500,000 loans each year; it has been changed to reflect over a million. Jonathan Corr's name has also been corrected._*
""Ellie Mae"":http://www.elliemae.com/ is growing its customer base and mortgage origination facilitation through the acquisition of ""Del Mar DataTrac, Inc."":http://www.dmdinc.com/ The recently announced transaction is projected to increase Ellie Mae's market share, putting them on track to originate nearly 30 percent of all residential mortgages in the U.S. this year.[IMAGE]
Ellie Mae's Encompass product solution will instantly broaden its reach with the purchase of DataTrac, a software program currently utilized by more than 200 lenders to enhance processing, loan funding, workflow efficiency, secondary marketing activites, and business intelligence reporting.
The company hopes that buying DataTrac could result in adding 20,000 clients to the Ellie Mae network, which already boasts over 50,000 clients within its Encompass360 mortgage management software. Those utilizing DataTrac will gain access to the Encompass360 system, providing users with a front-end, point-of-sale product for DataTrac's core operating systems.
The deal between the companies gives Ellie Mae 100 percent of Del Mar's equity, and Ellie May reportedly agreed to a $17.2 million purchase price at closing, followed by future payments totaling $8 million over the next three years.[COLUMN_BREAK]
""Del Mar's roster of customers includes some of the biggest and most respected lenders in the country.├âÔÇÜ├é┬á With this acquisition nearly a third of all residential mortgages originated in the United States will be able to flow through Ellie Mae's systems. I founded Ellie Mae to transform the mortgage industry by automating loan origination and driving paper out of the process,"" said Anderman.
""So the addition of the impressive Del Mar team and customer base is a big milestone for us.├âÔÇÜ├é┬á Our customers are looking to us to automate and streamline their businesses, and the combined Ellie Mae and Del Mar teams will continue delivering the high levels of innovation and service that our clients have come to expect,"" said Sig Anderman, Ellie Mae's president and CEO.
Del Mar's operations will continue to be based in San Diego, California, and the entity's sales, technology, support, and business development sectors will remain the key source of client support for those within the company's network. Jeb Spencer will join Ellie Mae as a member of its board of directors after departing his role as Del Mar's chairman, and additionally, Rob Katz has been named as Ellie Mae's executive vice president of product strategy.
Commenting on the acquisition, Jonathan Corr, Ellie Mae's chief strategy officer, said, ""As we see it, the combined talent and resources of two great companies that have been at the forefront of automation in our industry create an industry powerhouse with the scale needed to provide leading-edge technology and great service for our customers.""
The integration of software between the companies will include syncing DataTrac systems with Ellie Mae's Encompass program, and DataTrac will subsequently de-emphasize its software collaboration with other products, in addition to developing the point-of-sale component targeting DataTrac's users.
The combined products will be available for sale during the first quarter of 2012, and the purchase accounting rules will mandate that $1.5 million in revenue be deferred, which will initially drive Del Mar's revenue downward.
Based in Pleasanton, California, Ellie Mae's customers will fund over a million mortgages this year. ""In the mortgage technology industry today, bigger is indeed better, as it takes significant development resources to meet client demands for loan quality, compliance and efficiency,"" said Rob Katz, president of Del Mar.