The latest Home Mortgage Disclosure Act 2020 data shows Caliber ranks 8th in total loan volume with a total of $ 70.6 billion for the year.
New Residential Investment Corp. announced on Wednesday that it has entered into a definitive agreement with a subsidiary of Lone Star Funds to acquire Caliber Home Loans, one of the top 10 non-bank lenders.
With this acquisition, New Residential intends to merge the platforms of Caliber and NewRez, its wholly owned mortgage lender and service provider. The company stated that the transaction is expected to close as soon as possible and is targeted for the third quarter of 2021, subject to various approvals and customary closing conditions.
New Residential will pay $ 1.675 billion in cash for the acquisition, or approximately its expected tangible book value at the time of closing. New Residential intends to fund the acquisition through a mixture of existing cash and available liquidity on the combined balance sheet of New Residential and Caliber, as well as through a mixture of equity and the sale of certain securities.
“We believe this is a great acquisition for our company,” said Michaelörenberg, chairman, CEO and president of New Residential, in a statement. “Over the years, Caliber’s seasoned team has built a differentiated, purchase-focused creator with an impressive retail franchise and a solid track record of customer loyalty. The combination of the NewRez and Caliber platforms creates a leading financial services company with economies of scale, talent, technology and products to accelerate our mortgage company’s goals and generate strong profits for our shareholders. With this acquisition, we have significantly strengthened our performance in all interest rate environments. “
The acquisition adds an unpaid balance of Mortgage Services Rights (MSRs) of approximately $ 141 billion to New Residential’s portfolio.
“We are very excited to be joining the New Residential family,” said Sanjiv Das, CEO of Caliber. “By combining platforms with NewRez, we will join another industry pioneer who has complementary strengths and is committed to realizing the dream of home ownership. Our combination of strategies will allow us to accelerate our leadership position in purchase credit, expand our direct digital initiatives for consumers and brokers, and continue to advance our retail business. “
“If we take advantage of our digitization investments, we will make the entire mortgage process faster, easier and more efficient,” said Das. “We are excited to have the opportunity to deepen our customer relationships, expand our customer reach and offer our customers industry-leading products and options.”
The latest 2020 Home Mortgage Disclosure Act data shows the caliber 8th place in total credit with $ 70.6 billion in total origins for the year. This corresponds to a volume increase of 134.4 percent compared to 2019. Caliber has a recovery rate of 54 percent and served around 630,000 customers as of December 31, 2020.
Lone Star begins IPOing Caliber, but in October the company postponed its $ 345 million initial public offering indefinitely as market conditions were adverse due to rising coronavirus cases. IPO talks were revived in January, but that too failed to materialize.
Citigroup Global Markets and Goldman Sachs acted as financial advisor to New Residential and Skadden, Arps, Slate, Meagher & Flom acted as legal advisor to New Residential. Credit Suisse Securities and Barclays served as financial advisor to Lone Star and Caliber, and Mayer Brown served as legal advisor to Lone Star and Caliber.
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