Been meaning to get to this one for a while. Since Dinsfla already did a post on it I thought, why recreate the wheel…
Chardan 2008 Announces Its Acquisition
Monday, 14 December 2009
TORTOLA, British Virgin Islands, Dec. 14 /PRNewswire-FirstCall/ –
Chardan 2008 China Acquisition Corp. (Nasdaq: CACA, CACAW, CACAU) (“Chardan”) today announced that it has signed a definitive agreement to enter into a business combination with DAL Group, LLC (“DAL”), which, following the closing, will be one of the largest providers of mortgage processing services in Florida. At the closing of the business combination with Chardan, DAL will own 100% of the business and operations of Default Servicing, Inc. (“DSI”) and Professional Title & Abstract Company of Florida (“PTA”) and the non-legal operations supporting the foreclosure and other legal proceedings handled by
the Law Offices of David J. Stern, P.A. (“DJS”) (collectively referred to as the “Company”).
Upon consummation of the transaction, Chardan will change its name to DJSP Enterprises, Inc. (“DJSP”), and its stock is expected to continue to trade on NASDAQ under the symbols DJSP, DJSPU, and DJSPW.
The closing of the acquisition is subject to customary closing conditions, including approval of the acquisition agreement by holders of a majority of Chardan’s outstanding ordinary shares.
Following the closing of the business combination, DJSP will be one of the largest providers of processing services for the mortgage and real estate industries in Florida and one of the largest in the United States. The Company provides a wide range of processing services in connection with mortgages, mortgage defaults, title searches and abstracts, REO (bank-owned) properties, loan modifications, title insurance, loss mitigation, bankruptcy, related litigation and other services. DJS’s clients include all of the top 10 and 17 of the top 20 mortgage servicers in the United States, many of which have been customers of DJS for more than 10 years. The Company has approximately 1000 employees and is headquartered in Plantation, Florida, with additional operations in Louisville, Kentucky and San Juan, Puerto Rico. In addition, the Company’s U.S. operations are supported by a scalable, low-cost back office operation in Manila, the Philippines that provides data entry and document preparation support at a low cost.
The Company has experienced rapid growth over the past four years, increasing revenues from approximately $40 million in 2006 to approximately $199 million in 2008, while increasing net income, on a pro forma basis, for the same two periods from approximately $7 million to approximately $39 million. The Company had revenues of approximately $117 million for the 6 months ended June 30, 2009 and an adjusted pro forma net income for that period of $22 million, signaling continued growth.
DJSP’s principal market, Florida, currently ranks second among the 50 states in the number of mortgage loan foreclosures according to September 2009 data from the Mortgage Bankers Association (“MBA”). According to RealtyTrac, 8 of the top 25 U.S. metropolitan areas ranked by foreclosure rates in the second quarter of 2009 were in Florida.
The Company has invested heavily in its infrastructure and state-of-the-art information technology systems in recent years, enabling it to manage effectively and efficiently the large volumes of data it needs to meet its customers’ needs. The Company’s highly skilled staff, scalable proprietary processes and more than decade long experience in large-scale, efficient processing services has uniquely positioned the Company to capitalize on the rapidly increasing demand for efficient loan default processing services as a result of the historically unprecedented default volumes
Mr. David J. Stern commented,
“I am very excited about becoming the CEO of a NASDAQ-listed company. This will enable us to leverage our well-developed platform and decade-long experience to capitalize on the increasing business opportunities we have at hand.
Today, approximately one in seven households with mortgages in the United States is behind on mortgage payments or is in foreclosure, up from one in ten households a year ago. In addition, about 25% of residential mortgage loans in the U.S. are currently “under water,” with homeowners owing more on their mortgage loan than their home is worth. We believe this trend will persist as other macro-economic trends, such as high unemployment, ongoing option ARM resets and high levels of consumer debt will continue to hinder the ability of homeowners to meet their mortgage obligations. We believe that home prices will remain near current depressed levels for at least the next few years and that foreclosure rates will remain at historically high levels for years to come.”
Mr. Stern continued, “We anticipate that our growth will come from a number of areas. First, we anticipate a significant increase in business next year from services related to REO (bank owned) properties. This business involves helping banks dispose of properties that they have come to own through foreclosure. In 2008 and 2009 we provided REO processing services to only one client, but we have begun actively marketing this service to other clients. As a result, we expect meaningful increases from this portion of our business to occur in 2010 and beyond.”