Voxtur to Acquire Industry-Leading Digital Mortgage Asset Platform

August 15, 2022

GlobeNewswire —Voxtur announced today that its wholly-owned U.S. subsidiary, Voxtur Analytics US Corp., executed a purchase agreement (the “Agreement”) on August 12, 2022 for the acquisition of all of the issued and outstanding membership interests (the “Acquisition”) of Blue Water Financial Technologies Holding Company, LLC (“Blue Water”). Blue Water delivers SaaS-based solutions to investors trading mortgage servicing rights (MSRs) and whole loans to improve profitability, reduce risk, and increase liquidity of mortgage asset portfolios. Blue Water’s core analytic capabilities and advanced technology solutions are critical elements in an end-to-end mortgage asset solution. Blue Water’s platform is actively used by originators today and spans pricing, trading, commitment, pre-funding quality control, transfer, due diligence, and servicing oversight of various types of mortgage assets. This highly strategic acquisition will bring Voxtur’s technology suite to the secondary market, providing a natural attachment point and synergistic opportunities to both client bases.

About Blue Water

Blue Water is a leading provider of asset valuation, MSR distribution, MSR hedging, and digital solutions to MSR investors and mortgage lenders. By providing originators and investors the ability to view portfolios and analyze transactional data in real-time, the platform creates a one-stop shop to drive greater liquidity of mortgage assets. Blue Water uses a single platform across all investor types to mitigate timing risk and account for rate changes. Further, cost-minded originators use the platform to reduce margin exposure, lower costs, and streamline their secondary market post-close operations.

Blue Water’s self-service technology is able to replicate any investor pricing and modeling construct in real time to provide a unique solution tailored to its clients, including private equity investors and investment banks. Blue Water offers a turnkey solution to small financial institutions to source assets in a compliant manner with scale and efficiency. Blue Water manages a dynamic order book that allows systemically important financial institutions (SIFIs) to engage with different originators in a user-friendly asset sourcing SaaS offering. This technology allows a broad investor base to dynamically engage with originators and control their prospects based on asset preference, while giving originators free access to buyer-side liquidity. Separately, Blue Water’s automated advisor platform provides a springboard for investors to source product and deploy capital by leveraging the combined entities comprehensive services.

Founded in 2018, Blue Water has a revenue compounded annual growth rate of 262% from 2019 to 2021.  Additionally, Blue Water generated positive net income for 2020 and 20211.

Accretive Acquisition

Combining Blue Water’s digital asset capabilities with Voxtur’s proprietary data stores creates a powerful new platform that allows seamless integration and delivery of Voxtur’s core solutions with Blue Water’s advanced due diligence and data analytics.

The Acquisition is expected to:

  • Be immediately accretive to Voxtur’s adjusted earnings and cash flow;
  • Expand Voxtur’s influence in the U.S. secondary market; and
  • Accelerate Voxtur’s transition to a pure-play technology provider in the North American mortgage market.

Voxtur has maintained a targeted approach to solve inefficiencies and create value in the lending lifecycle. This accretive Acquisition focuses on reducing costs and inefficiencies in the transacting of mortgage-backed securities. Voxtur will integrate Blue Water with its existing technology to expand the Company’s capabilities within each core business unit. The Company’s business model focuses on dynamic data analytics and strategic data investments to drive growth and meet client needs in a changing market.

“The integration of Blue Water into the Voxtur product suite strengthens our technology foothold and places us squarely in the capital markets arena,” said Voxtur CEO Jim Albertelli. “The collective expertise of the Blue Water technologists, data scientists, and asset managers who seamlessly integrate technology and trading expertise creates a unique opportunity for Voxtur in the secondary mortgage market. This Acquisition will accelerate the evolution of Voxtur’s investments in technology and proprietary industry data into a resilient and dynamic growth platform.ʺ

“We are thrilled to be combining the Blue Water and Voxtur brands to provide dynamic and agile data analytic solutions to the mortgage industry. Voxtur’s expansive client base provides enormous opportunities for us as well as our clients,” said Blue Water Managing Partner Alan Qureshi. “This allows us to integrate best-in-class data, analytics, and market intelligence that will enhance our ability to deliver transparency and efficiency to our clients.”

RPC Ventures Fund I LP (“RPC”), Blue Water’s largest equity holder, lead the negotiations on behalf of the Blue Water equity holders. RPC is managed by Rice Park Capital Management LP (“Rice Park”). Commenting on the Acquisition, Nicholas Smith, Rice Park’s Chief Executive Officer, said “Blue Water has achieved significant market adoption by creating a suite of transparent and efficient digitally enabled services for buyers and sellers of MSR and loans. The Acquisition by Voxtur will expand Blue Water’s market access and provide additional value-added products and services that can be distributed through the combined platform. We are thrilled to become a shareholder of Voxtur and to explore ways for Rice Park to provide strategic value to Voxtur and Blue Water.”

Alan Qureshi will lead the newly created Voxtur Capital Markets business unit following the closing of the Acquisition.

Purchase Price

The total purchase price for the arms-length Acquisition is approximately USD$101M, subject to adjustment prior to closing, which will be satisfied by the following: USD$30M cash to be paid at closing; issuance of approximately 101M common shares of Voxtur (“Common Shares”), to be issued in equal installments each quarter for the 16 quarters following the closing; and issuance of approximately 69M Common Shares, to be issued in three equal installments, the first within 30 days of the closing and the second and third on the first and second anniversaries of the closing, respectively, in satisfaction of certain obligations of Blue Water under Long-Term Incentive Plans adopted by Blue Water in 2019 and 2022. The issuance of Common Shares in connection with the Acquisition will not result in the creation of a new Control Person (as that term is defined in the policies of the TSXV) of the Company. Voxtur has received a commitment from the BMO Financial Group to increase the total size of its credit facility by USD$30M to fund the cash consideration of the purchase price and certain transaction expenses (“Financing”).

The closing of the Acquisition is subject to the satisfaction of certain conditions, including receipt of required regulatory approvals, including the approval of the TSX Venture Exchange (“TSXV”), and expiration of the required waiting period under the Hart-Scott-Rodino Antitrust Improvements Act of 1976. Subject to the fulfillment of these conditions, the transaction is expected to close in the third quarter of 2022. Further to the above and subject to the terms of the Agreement, if the Agreement is terminated due to the Company’s failure to obtain (a) a binding, satisfactory commitment for the Financing within 30 days following the date of the Agreement or (b) conditional approval from TSXV for the Acquisition within 60 days following the date of the Agreement, the Company is required to pay a termination fee to the sellers in the amount of 10M Common Shares (“Termination Fee”). Upon payment of the Termination Fee, the Agreement would become null and void and the parties would have no further obligations thereunder.

Smith Hulsey & Busey LLP and Fasken Martineau DuMoulin LLP acted as legal counsel to Voxtur on the transaction. Sidley Austin LLP acted as legal counsel to Blue Water on the transaction.

Neither the TSXV nor its Regulation Services Provider (as that term is defined in the policies of the TSXV) accepts responsibility for the adequacy or accuracy of this news release.

About Voxtur

Voxtur is a transformational real estate technology company that is redefining industry standards in a dynamic lending environment. The Company offers targeted data analytics to simplify tax solutions, property valuation and settlement services throughout the lending lifecycle for investors, lenders, government agencies and servicers. Voxtur’s proprietary data hub and workflow platforms more accurately and efficiently value assets, originate and service loans, securitize portfolios and evaluate tax assessments. The Company serves the property lending and property tax sectors, both public and private, in the United States and Canada. For more information, visit www.voxtur.com.

About Rice Park Capital Management

Rice Park Capital Management LP is a private investment firm managing funds and investment vehicles on behalf of institutional investors, family offices and high net worth individuals. Its investment focus is to deliver cycle-resistant returns to its limited partners by unlocking value in complex opportunities in the residential and commercial mortgage and real estate sectors. For more information, visit www.riceparkcapital.com.

Forward-Looking Information

This news release contains forward-looking statements that involve known and unknown risks, uncertainties and assumptions that may not be realized. These statements relate to future events or future performance and reflect management’s current expectations and assumptions which are based on information currently available to management. There is significant risk that forward-looking statements will not prove to be accurate. A number of factors could cause actual results, performance or achievements, or other future events, to be materially different from any future results, performance or achievements discussed in the forward-looking statements. The inclusion of forward-looking statements and information should not be regarded as a representation of Voxtur or any other person that the anticipated results will be achieved, and investors are cautioned not to place undue reliance on such information.

These forward-looking statements are made as of the date of this news release and, accordingly, are subject to change after such date. Voxtur does not assume any obligation to update or revise this information to reflect new events or circumstances except as required in accordance with applicable laws.

Voxtur’s common shares are traded on the TSX Venture Exchange under the symbol VXTR and in the US on the OTCQB under the symbol VXTRF.

1 Blue Water’s financial results are reported in accordance with GAAP.

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