Williston Financial Group (WFG) is expanding in California by acquiring 22 retail title locations and operations centers from Doma.
Inman reports that Doma, “a struggling digital title and closing provider,” will receive up to $24.5 million for the sale of assets in northern and central California, per the companies’ purchase agreement. That includes $10.5 million paid upfront by WFG when the deal closed on May 19.
Doma may receive up to $14 million in additional earnouts next year based on “specified employee” retention by WFG, says Inman. The purchase agreement indicates that Doma had 123 employees at the sold locations who helped generate $37 million in revenue for the company last year.
Doma had announced it was reviewing its business to maximize shareholder profits and improve the homebuying process during a Q1 2023 earnings call.
The company had faced financial headwinds after raising less than anticipated in a merger with a special purpose acquisition company (SPAC) and experiencing a dramatic drop in revenue due to rising mortgage rates.
Doma reported a $42.1 million loss in the first quarter of 2023, says Inman, with a 34% decrease in revenue from the same period a year ago and a 77% drop in title orders closed.
It underwent three rounds of layoffs last year, cutting its workforce by 52% and leaving it with 1,062 employees as of Dec. 31, most of whom were based in California, Florida, and Texas.
Doma’s shares rose above 30 cents following the announcement, after trading as low as 28 cents in the past year. Doma intends to regain compliance with the NYSE’s $1 share price rule by implementing a reverse stock split at the annual shareholders meeting this summer.
A joint release by the companies states that the acquisition enables Doma to focus on its core underwriting and technology business, and WFG to expand its market coverage and client base in the region.
Portland, Oregon-based Williston Financial Group is the parent of WFG National Title Insurance Company (WFG).