Magazine article American Banker

Xerox to Acquire Loan Document Software Provider

Magazine article American Banker

Xerox to Acquire Loan Document Software Provider

Article excerpt

Xerox Corp. is pushing further into the financial services market with a deal to buy a company that provides software for exchanging mortgage documents electronically.

The Stamford, Conn., company announced its $32 million deal for Advectis Inc. of Atlanta on Wednesday.

John Kelly, the president of Xerox's Global Services North America division, said in an interview that his group's mission is "helping clients with the most document-intensive processes."

The company "lacked a very strong digital platform - paperless platform," he said. "In Advectis we found everything we were looking for."

Advectis sells the BlitzDocs platform, which lets mortgage industry participants exchange documents over a network. Greg Smith, Advectis' co-founder and chief executive, compared the platform to the fax machine, which transformed office procedures only after it became widespread.

"When the first fax machine was created, it had no value in and of itself. ... When there were a thousand fax machines, there was more value," he said. "The same is true in our environment."

Lenders using BlitzDocs can shave $100 to $150 off the cost of handling each loan, and the added efficiency could allow for more business, Mr. Smith said.

"There is a lot of inefficiency in our industry and in the process of getting a mortgage today," he said. At each point "there is a handoff" from one entity to another, "and that handoff is a friction point."

Mr. Kelly cited research from TowerGroup Inc., a Needham, Mass., independent research firm owned by MasterCard Inc., which found that lenders spent $3.2 billion on document management last year. "If we took 20% to 30% out of that, that's a sizable opportunity for us to go after," he said.

He would not discuss Xerox's plans for similar acquisitions, but siad, "we're always looking for the right opportunities. We don't have to build it if we can buy it. …

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