ISGN, a technology vendor with products across the entire spectrum of mortgage finance, is considering offers for the company, or possibly strategic partnerships, according to industry observers familiar with the matter.
Industry observers say ISGN is on the market and the technology, management and consulting firm Accenture is among those taking a look, although some of them say it is just talk.
A source close to ISGN said “something’s in the air,” but couldn’t comment further on anything that may be pending.
Two other sources with ties to the company called the potential deal a rumor, but one with some credibility.
Mortgage technology consultants said the rumors of ISGN’s talks with Accenture have been growing for months. ISGN and Accenture both declined to comment.
“I have heard that, but nothing really verifiable,” said Scott Cooley, a mortgage technology consultant.
Cooley, who is not involved with either company, believes Accenture would be a good partner for ISGN because it’s a large company that could invest its resources to grow ISGN, while taking advantage of ISGN’s established portfolio of mortgage technology services.
“They’ve got a lot of the pieces, so for a company like Accenture or any of the other number of players, I could see where ISGN would be fairly attractive,” Cooley said. “They’ve got a lot of the pieces of the puzzle together and it allows ISGN to have some financial backing and get them into the bigger companies.”
If ISGN is open to an acquisition deal, Cooley said it’s possible a technology company already established in the mortgage space could make an offer.
But an investment banker that specializes in mortgage technology mergers and acquisitions warned that the speculation could be overblown. Rather than an out-and-out acquisition, ISGN and Accenture may be looking to form a strategic partnership or business relationship that would give Accenture access to ISGN’s mortgage technology and ISGN access to Accenture’s vast resources, but would keep the two companies separate entities.
“I suspect that what’s happening is that maybe they’re talking to each other, but the problem is—and it’s not a problem, it’s a good thing—today, everybody seems to be talking to each other,” said John Guzzo, a managing director at investment bank Berkery Noyes. “From my view, sometimes something—whether it’s a joint venture or some kind of commercial relationship and not even an M&A—could be transpiring, but people who aren’t close to it and are just kind of looking in maybe think that there’s something bigger there than there really is.”
Guzzo specializes in facilitating capital investments and merger and acquisition deals in the mortgage technology space, like the multimillion-dollar investment by private equity group Monitor Clipper Partners in vendor Mortgage Cadence. He said typically when a company wants to get acquired it will use advisors to “shop them around.” While he’s not involved with ISGN or Accenture, Guzzo said ISGN hasn’t done that.
“I’m not saying it couldn’t be true, but they’re pretty sophisticated, they’re on the larger side and they’ve done a lot of deals,” Guzzo said. “And unless Accenture came in with a whopping premium price that behooves them not to look elsewhere, I’d just be a little surprised if they’re actually going to do an M&A deal that’s so, so secretive in this incestuous market, without anyone knowing.”
ISGN is based in Bensalem, Pa. and is owned by the private equity firm K.K. Birla, along with New Enterprise Associates and its affiliate, NEA-IndoUS Ventures. Accenture is headquartered in Dublin, Ireland, with large offices in New York and Chicago. It had nearly $21.6 billion in revenue during its 2010 fiscal year.
