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The Deal: Altisource Buys Equator

NEW YORK (TheStreet) -- Altisource Portfolio Solutions (ASPS) said Wednesday it has agreed to acquire privately held mortgage software provider Equator for up to $150 million in cash and stock.

Deal terms call for Equator to receive about $70 million at closing, expected by the end of the third quarter, and up to an additional $80 over the next three years based on its financial performance.

Luxembourg-based Altisource is going to pay for the transaction with 80% cash and 20% in restricted stock. The agreement does not permit Equator to seek higher bids.

Los Angeles-based Equator, founded in 2003, provides real estate- and mortgage-related services including loan processing, foreclosures and short sales through its EQ software platform. Equator claims that its software assisted in about 36% of all distressed real estate transactions in 2012.

Equator said it services four out of the top six U.S. mortgage providers and more than 460,000 real estate agents.

"The acquisition expands our marquee client list and provides our customers with one of the most comprehensive real estate lifecycle management platforms and services marketplaces available," Altisource CEO William Shepro said in a statement.

Equator CEO and co-founder Christopher Saitta added in a statement that the two companies already share a similar product and customer base and the acquisition will give it the financial resources needed to develop new products in order to keep up with industry competition.

It's an industry that, along with the recovery in the housing market, has been seeking a pickup in M&A.

This month, Seattle-based Zillow (ASPS) agreed to acquire New York online real estate listing and information provider StreetEasy for $50 million in cash. In May, San Francisco online real estate information services provider Trulia (TRLA) acquired rival Market Leader for about $355 million in cash and stock.

Saitta, along with Equator's 400 employees, are expected to join Altisource.

Moelis & Co.'s Brian Webber and Evan Winkler advised Equator, which was represented by Sheppard Mullin Richter & Hampton 's David Sands, Zac Turke, Amrita Nangiana, Keith Gercken and Jeff Kaye.

Bryan Cave represented Altisource.

Altisource shares were trading 5% higher to $127.50 on Wednesday afternoon, giving it a market capitalization of $2.9 billion.

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