*Reaction To The Avista Acquisition Starts Coming In*
**By Tony Garritano**
***As you all know, D+H, the parent company of point-of-sale vendor Mortgagebot, acquired loan origination system Avista Solutions for $40 million. I broke the news yesterday. Since the scoop, I’ve gotten a lot of reaction from various industry experts. It’s great to hear your thoughts. Now that we’re about 24 hours removed from the news breaking, I thought that I would share what people are saying about this deal. I also got a chance to talk with Matt Cotter, senior vice president of sales and marketing at Mortgagebot. Here’s the industry reaction to this big acquisition:
****“Avista is a perfect fit,” said Cotter. “Our customers have been asking us to get into the LOS space for years. The challenge is that we are focused on the point-of-sale and to build an LOS would distract us. So, the acquisition made perfect sense. Also, Avista is a Software as a Service-based product, which fits with our culture.
****“For D+H, this continues their process of diversifying their revenue and geographic footprint. Avista will act as a subsidiary. Mark Phlieger and his entire team at Avista will stay. Mark reports into Scott Happ of Mortgagebot, who reports into D+H. This acquisition is about growth and adding value.”
****Personally I have known Mark Phlieger for many years. He is certainly a friend. Good for him that he started the company and built it to the point that it could be sold for a nice price tag. He did a great job. Also, kudos to Mortgagebot and D+H for acquiring an LOS as part of their strategy to expand in the U.S. mortgage space. To me, it sends a message that both companies are committed to our space.
****So, what happens now that the acquisition is done? “Priority No. 1 is to get the files from Avista and Mortgagebot talking back and forth. From there, we’ll do a tighter integration. It’s a high priority. Historically there has been best-of-breed applications where you have great functionality but you trade off with the integration process. We want to provide an end-to-end solution that is best-of-breed.”
****Celebration aside, some of the reaction that I have gotten since breaking this story has been mixed. Off the record, several origination vendors are a bit fearful. Now that POS Mortgagebot has an LOS in Avista, many LOS vendors see Mortgagebot as competition. They know that the end goal will be, as Cotter suggests, to come to market with one offering at some time in the future. Some of these vendors have said off the record that they may not integrate to Mortgagebot as tightly and may look to some of Mortgagebot’s competitors instead. They don’t want Mortgagebot trying to sell their clients on switching off of their LOS of course.
****In my talk with Matt Cotter, he was understanding and sympathetic to their concerns. He told me, “We have hundreds of joint clients with many of the LOS systems. For us it is important that we continue to work with every LOS. We are going to have to make sure that we deliver on our commitments and ease their concerns over time.”
****What’s the big takeaway from this deal? “This is best-of-breed plus an all-in-one approach,” answered Cotter. “These are two systems that are functionally rich that will eventually be combined into one system. The products will be end-to-end, but they’ll also stay stand alone to compete on their own merits. The customer will decide what they want. As a theme, both Avista and Mortgagebot focus heavily on the midtier. Both products are also SaaS, and that’s something we believe in.”
****I’ll keep you posted on next steps. In the meantime congratulations to Avista, Mortgagebot and D+H. The mortgage industry is worth investing in. The people in this space are dedicated. This deal validates our industry’s clout and relevance.
Tony Garritano is chairman and founder at PROGRESS in Lending Association. As a speaker Tony has worked hard to inform executives about how technology should be a tool used to further business objectives. For over 10 years he has worked as a journalist, researcher and speaker in the mortgage technology space. Starting this association was the next step for someone like Tony, who has dedicated his career to providing mortgage executives with the information needed to make informed technology decisions. He can be reached via e-mail at email@example.com.