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System 2 Thinking Streamlines Title Agency Mergers and Acquisitions

System 2 Thinking, Title Insurance News     S2TMaster

05 May, 2019

Title agency mergers and acquisitions have reached breakneck pace. Growth in the title industry is offering a myriad of buying and selling opportunities. System 2 Thinking is helping to streamline the process, making it easier for title agencies of all sizes to get in on this highly lucrative trend. 

Why Title Agencies Sell

For smaller title companies, their strategies might not have panned out as well as they had hoped. They might have made some progress in market share but have stagnated in their growth. They might also be having trouble competing with larger companies. If these companies don’t have an exit strategy, they might face some unpleasant realities. 

Smaller title agency owners might have put their hopes in a family member taking over but have not been able to make this happen. Others might be looking at major players on their team to show interest, but finances haven’t panned out for them. It just takes a quick look at any title agent’s LinkedIn profile to see how much they bounce from agency to agency today. 

Another major issue is ensuring changing regulatory matters are being addressed. Technological advances have streamlined many processes, but smaller companies might not have the resources to invest to keep up. 

Security and privacy issues have increased the risk of wire fraud, potential title claims, and escrow losses. Smaller companies can be completely wiped out when trying to mitigate fraudulent activity.

Why Title Agencies Buy

Many title companies are looking for ways to expand their reach. Acquiring smaller title companies in very small regions can make it easier to do so. National title companies, because of their size, are looking to either plant capital or expand. They have the technological capabilities to quickly scale their companies and enter new markets. 

In fact, technology acquisition is often a driving force for buyers. They know they need to update their technology to remain competitive but don’t have the know-how to make wise investments on setting up the necessary systems. They can more easily acquire a company that is looking to sell and has the technology in place. They kill two birds with one stone by expanding their reach and bringing their company into the digital era.

Another driver is diversification of their products and services. In many cases, instead of outright acquisitions, mergers make more sense. Consolidation can be very effective as it adds value when duplicate infrastructures are eliminated. Also, they can increase revenue without affecting their cost base, such as title companies that might have been focused on an area like refinancing or defaults. 

Getting Ready to Sell

System 2 Thinking’s veteran M&A specialists are uniquely qualified to help private and public equity investors navigate every facet of the complex merger and acquisition process. Our experts provide unrivaled consulting services to clients in developing robust growth strategies, identifying and capitalizing on opportunities, and completing thorough due diligence. 

System 2 Thinking is trusted by real estate service providers, tech startups, and Fortune 1000 companies to consistently deliver transformational outcomes in competitive environments.

We drive innovation and fuel business acceleration with compliance consulting, licensing, innovation strategies, technology rollouts, and process optimization.

Visit our homepage to learn more.

 

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