Ellie Mae, Pleasanton, Calif., has acquired Del Mar DataTrac Inc., San Diego, for $17.2 million cash at closing, and future cash payments of $3 million, $3 million and $2 million to be paid over the next three years.
In a statement, Ellie Mae said its plans are to integrate Del Mar's DataTrac system with its Encompass product. Sales of DataTrac for use with any product other than Encompass will be de-emphasized and Ellie Mae will devote considerable resources to developing the Encompass point-of-sale component for DataTrac users by the end of this year so the combined product can be sold in the first quarter of 2012.
DataTrac is used by more than 200 mortgage lenders as a core operating system to process and fund loans, create workflow efficiencies, manage secondary marketing transactions and handle reporting and business intelligence.
Its current customers are expected to fund an estimated 500,000 mortgages in 2011. The combined companies' customer base has the potential to originate approximately 30% of all residential mortgages originated in the United States this year.
Ellie Mae's Encompass360 will be made available to DataTrac users as a front-end point-of-sale component.
Jeb Spencer, chairman of Del Mar DataTrac, has joined Ellie Mae's board while its president, Rob Katz, has been named Ellie Mae's executive vice president of product strategy.
Ellie Mae said the deal should be accretive to its net earnings by the end of next year.
