March 28, 2011 - 6:00 AM EDT
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Walter Investment Management Corp. Announces Definitive Agreement To Purchase Green Tree Credit Solutions
Walter Investment Management Corp. Announces Definitive Agreement To Purchase Green Tree Credit Solutions
Mar. 28, 2011 (PR Newswire) --
TAMPA, Fla., March 28, 2011 /PRNewswire/ -- Walter Investment Management Corp. (NYSE Amex: WAC) ("Walter Investment" or the "Company") today announced it has entered into a definitive agreement to purchase GTCS Holdings LLC ("Green Tree") in a transaction valued at $1.065 billion. Green Tree, based in St. Paul, Minnesota, is a leading independent, fee-based business services company which provides high-touch, third-party servicing of credit-sensitive consumer loans. Green Tree brings to Walter Investment a high-growth platform, with long-standing relationships with a diverse, blue chip customer base, as well as a highly successful management team which averages 25 years of industry experience. This acquisition will transform Walter Investment into a leading business services company focused on recurring, fee-based revenues generated from an "asset-light" platform.
"We believe that with the acquisition of Green Tree, Walter Investment will be uniquely positioned to capture a significant share of the growing specialty mortgage services sector," said Mark J. O'Brien, Walter Investment's Chairman and Chief Executive Officer. "Green Tree's businesses, operational strategy, philosophy and culture are much the same as ours, providing opportunities to achieve both revenue and expense synergies as we pursue our common strategic objectives for growing the business and enhancing long-term shareholder value."
"Green Tree has demonstrated its ability to capitalize on the cyclical and secular trends in the mortgage sector which we believe offer great opportunities for significant revenue growth," continued Mr. O'Brien. "The ability to generate revenues from recurring, fee-based sources, with high operating margins from an asset-light platform is an especially attractive addition to our existing business model."
"By bringing these two companies together, we expect to create greater financial flexibility and to build upon our substantial competitive advantages," said Keith Anderson, Chief Executive Officer of Green Tree. "The Green Tree team has built a solid reputation as a best-in-class business services company. Now, by combining with Walter Investment, we will be able to operate within a larger and stronger capital base, enhancing our ability to execute our strategic objectives and meet our long-term financial goals."
Approvals and Anticipated Closing
The Board of Directors of Walter Investment has unanimously approved the transaction. Walter Investment will issue approximately 1.8 million shares of common stock to the seller, assume approximately $20 million of existing Green Tree debt, and issue $765 million of new debt which has been fully committed by Credit Suisse and The Royal Bank of Scotland plc and which, together with cash, will be used to acquire the equity of Green Tree, repay existing Green Tree indebtedness and pay fees and expenses of the transaction. As a result of this transaction, Walter Investment will no longer qualify as a REIT. The transaction is subject to receipt of governmental approvals, third-party consents and the satisfaction of other customary closing conditions. The transaction is not subject to a financing condition. The Company expects to complete the transaction early in the third quarter of 2011
