Strategy Drives Fixed Recurring Revenue Mix and Significant Margin Expansion
Reseller Businesses to be Reported as Discontinued Operations
CoreLogic (NYSE:CLGX), a leading global provider of property information, insight, analytics and data-enabled solutions, today provided additional information related to the pro-forma impacts of the planned divestitures of its Reseller Businesses.
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"The discontinuation of and sale of our reseller operations is expected to significantly enhance our revenue profile and increase margins. In terms of revenue, the exit from these operations will accelerate our shift to higher fixed recurring revenue streams and significantly reduces our exposure to mortgage volatility," said Frank Martell, President and Chief Executive Officer.
Exit of Reseller Businesses
As announced on July 23, 2020, CoreLogic plans to divest its Reseller Businesses which include Tenant Screening and Credit and Borrower Verification Solutions. Consistent with Generally Accepted Accounting Principles, these businesses will be reported as Discontinued Operations as of September 30, 2020 and will be retrospectively classified as such in the Company's consolidated financial statements.
Consistent with its strategic program, the Company believes that the sale of its Reseller Businesses will (i) accelerate investment and growth of its core data-driven solutions, (ii) raise the Company's organic growth profile across its operating segments to more than 5%, (iii) generate sustained adjusted EBITDA margins of greater than 35%, and (iv) increase fixed recurring revenue to approximately 55% of total revenues. In addition, the Company believes these business exits will significantly lower its exposure to mortgage market volatility impacts and raise the share of non-mortgage revenue from approximately 40% to 45%.