Covius acquires Nationwide Title Clearing

Covius Holdings' acquisition of Nationwide Title Clearing expands its post-closing offerings, much in the same way its 2020 purchase of Clayton Services did for due diligence.

"One of our primary goals is to create a counterbalanced, diversified earnings business model," said Rob Clements, Covius' chairman and CEO. "Over time we've been able to really diversify with products and services that are targeted towards the origination business, servicing-related businesses and with the Clayton acquisition, now we have strong capital markets capabilities."

The diversification allows the company to draw revenue in any macroeconomic environment and interest rate cycle for the mortgage business, similar to the natural hedge between originations, servicing and capital markets that many lenders rely upon, Clements said.

The NTC transaction should be completed in the fourth quarter. Terms of the deal were not disclosed.

NTC offers lien release services and post-closing document production. It also is in the default servicing and title curative segment.

This is Covius' fourth major purchase in the past four years.

It entered the lien release business with the April 2018 acquisition of Require Holdings. Then in 2019, it purchased several of Chronos Solutions businesses, including default management and lien tracking for homeowners' associations.

Covius moved into the secondary market due diligence side when it purchased Clayton Services from Radian Group in early 2020.

In 2015, when Covius was still known as LenderLive, it purchased Walz Group, a provider of certified mail services for mortgage servicers and auto lenders.

On the other hand, LenderLive sold its loan fulfilment and secondary marketing units to Computershare in August 2018 to concentrate on technology-driven services.

Unlike this transaction, the previous Covius deals were more about product diversification, Clements said.

Require "was a much smaller, less scalable platform," he added. "This is really an example of our focus on acquisitions that give us much greater scale."

Evercore acted as Covius’ financial advisor and Willkie Farr & Gallagher as legal advisor while Carr, Riggs & Ingram acted as advisor to NTC.

All of the approximately 670 NTC employees will join Covius, including the company's senior management, following the deal's completion.

Even though it has done a deal per year recently, Covius does not have any predetermined timeline on when it does mergers and acquisitions.

"We're opportunistic, but we have set a high bar for the transactions we pursue, there has to be a real strategic fit," Clements said. "Because simultaneously we have been enjoying very strong organic growth and so we're well positioned to continue to grow and create value without doing any further acquisitions, just harvesting the opportunities we have in front of us today."