MphasiS to Acquire Digital Risk LLC for USD $175 Million

  MphasiS to Acquire Digital Risk LLC for USD $175 Million

    Move to attain leadership position in the US Mortgage Services Market

Business Wire

ORLANDO, Fla. & BANGALORE, India -- December 03, 2012

MphasiS (an HP Company) today announced a definitive agreement to acquire
Orlando, Florida, USA based Digital Risk LLC. Digital Risk is one of the
largest independent providers of Risk, Compliance and Transaction Management
solutions to the United States mortgage market. The acquisition is an all cash
deal valued at USD$ 175 million with an additional earn-out component.

Digital Risk provides highly specialized Risk, Compliance and Transaction
Management solutions for the mortgage industry. Digital Risk’s proprietary
Making Mortgages Safe™ solutions suite is deployed by over 15 blue chip
clients across key mortgage constituencies – Originators, Insurers, Issuers
and Investors. Digital Risk is licensed to operate in 46 states in the United

In August 2012, Digital Risk was named as one of America’s entrepreneurial
growth leaders by Inc. Magazine. Digital Risk ranked number 11 among the
fastest growing private financial services companies in the US, in 2012 Inc.
500 list.

Digital Risk is expected to register revenues of USD $127 million in CY2012.
The company has grown at revenue CAGR of 70% in the last 3 years.

“We began our journey of transformation in 2010 focusing on the Financial
Services Industry. This acquisition is central to our strategy of offering
specialized services in chosen segments. Digital Risk offers highly
specialized services in risk and compliance area, specific to mortgage
industry. Their analytics platform combined with 1500 mortgage specialists
makes them unique and differentiated. I am delighted to have Digital Risk with
their strong brand join our family.” said Ganesh Ayyar, chief executive
officer – MphasiS.

“The need for risk management in the mortgage market is not only a U.S. issue
but also a global necessity. This acquisition provides the industry and
clients a unique offering,” said Peter Kassabov, chairman and chief executive
officer -Digital Risk. “We’ve developed proven processes, analytics and
technology that are making mortgages safe and this expertise applies to
markets outside the U.S. We are thrilled to merge our talent and expertise
with that of MphasiS to set a global standard for making mortgages safe.” said

The transaction is currently expected to close by January 31, 2013 subject to
regulatory approvals and other customary closing conditions. Upon completion
of the transaction, Digital Risk will operate as a standalone business unit
retaining its brand identity. Digital Risk’s founders will continue to lead
the company, with Peter Kassabov reporting to Ganesh Ayyar, CEO MphasiS.
Digital Risk’s, management team and employees will remain with the company and
continue serving their customers. This acquisition significantly enhances
MphasiS’ onshore presence in the US. MphasiS, has plans to expand its
footprint in United States creating up to 500 new jobs in the near future.

“The subprime mortgage crisis set off a chain of events from rising mortgage
losses, to a decline in mortgage-backed securities issuance to increased
federal and state regulation,” said Craig Focardi, senior research Director -
CEB TowerGroup. "From 2009-2011, per loan origination costs increased by 40
percent and servicing costs increased by 36 percent, according to Mortgage
Bankers Association. Risk management and compliance activities such as quality
control, loan purchase due diligence, loan portfolio surveillance and
analytics are a large share of these cost increases. To reduceinternal fixed
costs,financial institutions need to make improvements in these areas, which
is essential for producing defect free loans and restoring sustainability to
US residential mortgage marketing and securitization."

In this transaction, Avendus Capital acted as the exclusive financial advisor
and Goodwin Procter LLP acted as legal advisor to MphasiS. Portico Capital
Securities, LLC served as financial advisor to Digital Risk and Katz, Teller,
Brant & Hild acted as legal advisor to Digital Risk.

About Digital Risk

Digital Risk is one of the largest providers of mortgage risk and compliance
management solutions. The company provides buyers and sellers of mortgages and
mortgage backed securities the analytical, technological and risk management
services they need to achieve their goals. The Digital Risk platform delivers
transparency at the loan level and precise risk assessment throughout the
entire mortgage value chain. With over 1,500 U.S. based professionals, the
company counts the nation's leading servicers, originators, aggregators and
investors among its clients. Digital Risk is independent and not affiliated
with any originator, issuer, servicer or investor. Headquartered in Orlando,
Digital Risk has additional operations in New York, Dallas, Denver, Chicago,
Boca Raton, Tampa and Jacksonville.

About MphasiS

MphasiS (an HP Company) is a USD 1 billion global service provider, delivering
technology based solutions to clients across the world. We service clients in
a variety of industries, including Banking and CapitalMarkets, Insurance,
Manufacturing and Communications. MphasiS' integrated service offerings in
Applications, Infrastructure Services, and Business Process Outsourcing help
organizations adapt to changing market conditions and derive maximum value
from IT investments. For more information about MphasiS, log on to


Certain statements in this release are forward-looking statements, which
involve a number of risks and uncertainties that could cause actual results to
differ materially from those in such forward-looking statements. These risks
and uncertainties include, but are not limited to, expected benefits from the
acquisition by MphasiS of Digital Risk and various economic, political,
regulatory or other conditions. MphasiS does not undertake to update any
forward-looking statement that may be made from time to time by or on behalf
of the company. Additional information about such risks can be found on the
company’s website at www.MphasiS.Com


MphasiS Corporate Communications
Michelle Nalini Kumar
Mobile: +91 98450 61533
Madhavi Kochar
Mobile: +91 9880 133311
United States
MphasiS Corporate Communications
Deepa Nagraj
Mobile: +1 201-779-4282 /+91 98452 56283
Schwartz MSL
John Moran / Shweta Agarwal, +1 781-684-6228
Digital Risk
Brandie Young, +1 510-599-2785
Citigate Dewe Rogerson
Shiv Muttoo
Mobile : +91 98335 57572
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