Nicholas Schorsch's growing broker-dealer,
RCS Capital Corp., announced Thursday that it has agreed to acquire a majority interest in Docupace Technologies.
Docupace is a 12-year-old private company that provides SEC- and Finra-compliant paperless processing systems for financial services firms. Its core offering, ePACS, is now used by more than 500 client firms and 70,000 individual users. The web-based ePACS product, which can be used on mobile devices, offers end-to-end processing from account opening to record keeping.
The deal won't be proprietary, so broker-dealers currently using Docupace can continue to use the ePACS client intake and document storage systems, RCS Capital president Mike Weil said.
“We'll let everybody play with the ball,” Mr. Weil said. “We see this as a broad open architecture solution, and we will continue to operate in that manner.”
Mr. Weil declined to disclose the terms of the transaction. But he said the deal created a “beneficial joint venture structure” that provides RCS Capital, often referred to by its ticker symbol RCAP, with a scalable and recurring revenue stream and Docupace with deep-pockets funding that will allow the firm to develop new technologies faster.
Docupace president and chief executive Michael Pinsker said RCAP's investment will give his firm capital and resources so it can expand its product suite and market share.
“Our vision for the industry and overall solutions we can provide is perfectly aligned,” Mr. Pinsker said. “We consider RCS Capital a perfect partner for us in future stages of our growth.”
Mr. Pinsker will remain president and CEO of Docupace.
Louisa Quarto, president of Realty Capital Securities, RCAP's broker-dealer distribution arm, said ePACS is an industry leader in web-based processing that is both secure and compliant with regulations of the Securities and Exchange Commission and the Financial Industry Regulatory Authority Inc.
“Many of our brokers are already using ePACS,” Ms. Quarto said. “It's the foundation on which the straight-through processing solution is being designed.”
Docupace's technology will make sales of alternative products sold through RCAP, including nontraded real estate investment trusts, more efficient, she said.
“It is designed to bring better efficiencies and compliance to the processing of a manual and paper-intensive industry right now,” Ms. Quarto said. “Today, subscriptions are often time-consuming and not in good order. Straight-through processing will help the industry to evolve to delivering subscriptions that meet state suitability standards and a broker-dealer rules environment.”
Mr. Weil noted that RCAP's previous tech transactions, including the acquisition of the Trupoly relationship management portal for
crowdfunding and the
digital marketing deal with smart-data lead generation startup Vestorly, signal its desire to be on the cutting edge of innovation in the broker-dealer space.
“Our philosophy is based on whatever we can do to making business easier for an adviser,” said Mr. Weil. “Part of what we see as a challenge in the industry is remaining compliant while still conducting business. Technology is a great tool in that quest,” he said.
