New Residential Investment To Acquire Home Loan Servicing For $1.3 Bln

(RTTNews) - Real estate investment trust New Residential Investment Corp. (NRZ) will acquire Home Loan Servicing Solutions, Ltd. (HLSS) for about $1.3 billion, the two companies said Sunday.

New Residential Investment noted that the acquisition will significantly add to its book of servicing assets and expand relationships with mortgage servicers.

Under the deal, New Residential Investment will acquire all of the outstanding shares of Home Loan Servicing for $18.25 per share in cash. The purchase price represents an almost 9 percent premium to Home Loan Servicing's closing stock price of $16.76 on February 20, 2015.

New Residential Investment primarily targets investments in mortgage servicing related assets and other related opportunistic investments. The New York-based company is managed by an affiliate of Fortress Investment Group LLC (FIG).

Home Loan Servicing was formed to acquire mortgage servicing assets consisting of mortgage servicing rights, rights to fees and other income from servicing mortgage loans, and associated servicing advances. The company's principal executive offices are located in the George Town, Cayman Islands.

Michael Nierenberg, Chief Executive Officer of New Residential said, "The acquisition will significantly add to the value of our book of mortgage servicing assets and expand our relationships with mortgage servicers to include both Nationstar Mortgage and Ocwen Financial Corp., which are the two largest non-bank servicers in the United States. We are confident that this transaction will enhance our earnings growth potential and our ability to generate strong returns for our shareholders."

The boards of directors of both companies have approved the acquisition that is expected to close in the second quarter of 2015, subject to Home Loan Servicing shareholder approval and other customary closing conditions.

New Residential was advised on the acquisition by BofA Merrill Lynch and Credit Suisse as financial advisors and Skadden, Arps, Slate, Meagher & Flom LLP, Sidley Austin LLP, and Maples and Calder as legal advisors.

For Home Loan Servicing, Citi served as financial advisor and Weil, Gotshal & Manges LLP and Walkers as its legal advisors.

NRZ closed Friday's trading at $13.09, up $0.01 or 0.08 percent on a volume of 635,976 shares. HLSS closed Friday's trading at $16.76, down $0.46 or 2.67 percent on a volume of 3.77 million shares.