nCino to Acquire SimpleNexus for $1.2B


nCino, Inc. (NCNO), the financial technology company focused on cloud banking and digital transformation solutions, announced that it has entered into a definitive agreement to acquire the developer of mobile-first technology for mortgage lenders, SimpleNexus, for $1.2 billion.

Terms of the Deal

The transaction is likely to close by the end of nCino’s fiscal fourth quarter. nCino plans to fund the deal with $240 million in cash and approximately 13.2 million shares of nCino Common Stock.

Implications of the Deal

With this buyout, nCino will add SimpleNexus’ leading digital homeownership software and subsequently gain access to over 80 banks and credit unions and more than 41,000 loan originators nationwide.

Notably, nCino’s capabilities in the mortgage market will also receive a boost with the acquisition. The deal is expected to expand the company’s serviceable addressable market by over $4 billion.

Both companies will work together to take advantage of SimpleNexus’ consumer front-end technology and domain expertise to hasten the development of nCino’s mobile and point-of-sale offerings across additional lines of business.

Management Commentary

The CEO of nCino, Pierre Naudé, said, “Just as nCino has transformed the process for commercial, small business and retail lending, treasury management and account opening, SimpleNexus has streamlined the many stages of the homeownership process into a single, seamless journey. Their innovative solution and deep subject matter expertise in consumer front-end technology will extend our capabilities to the U.S. point-of-sale mortgage space and enhance nCino’s mobile and point-of-sale offerings, unlocking additional opportunities and value for our customers and their clients.”

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Price Target

On November 17, Needham analyst Mayank Tandon reiterated a Buy rating on the stock with a price target of $85, which implies upside potential of 24.8% from current levels.

The Wall Street community is cautiously optimistic about the stock and has a Moderate Buy consensus rating based on 3 Buys and 2 Holds. The average nCino price target of $85.40 implies that the stock has upside potential of 25.4% from current levels.

Smart Score

nCino scores an 8 out of 10 from TipRanks’ Smart Score rating system, indicating that the stock is likely to outperform market expectations. Shares have declined 7.3% over the past year.

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