Radian Guaranty, the mortgage insurance subsidiary of Radian Group (RDN), announced the sale of Radian Asset Assurance Inc., Radian's financial guaranty insurance subsidiary, to Assured Guaranty Corp., a subsidiary of Assured Guaranty (AGO).

In July 2014, Radian hired Goldman Sachs (GS) to evaluate interest in Radian Asset, leading to the sale to Assured Guaranty, which was agreed to in late December.

According to Assured Guaranty, the final purchase price for Radian Asset was $804.5 million, paid in cash.

According to Radian, its net proceeds on the deal were $789 million, due to transaction-related expenses.

“The sale of our financial guaranty subsidiary marks an important milestone for Radian as we simplify our focus on our core strengths and position our company for future top-line growth,” Radian CEO S.A Ibrahim said. “The successful completion of the sale will also help to accelerate our ability to comply with the final PMIERs."

Radian Asset will be merged with and into Assured Guaranty, with Assured Guaranty remaining as the surviving company, Assured Guaranty said in a release.

As a result of the deal, the assets and obligations of Radian Asset will become the assets and obligations of Assured Guaranty.

As of Dec. 31, 2014, Radian Asset’s statutory capital was approximately $1.3 billion. As of Feb. 28, 2015, Radian Asset’s statutory net par outstanding was approximately $13.9 billion, the companies said.

“Assured Guaranty has added a solid book of business that is consistent with our core strategic objectives,” said Dominic Frederico, President and CEO of Assured Guaranty.

“We are pleased to have acquired Radian Asset and to extend AGC’s protection to Radian Asset’s insured bondholders,” Frederico continued. “The acquisition increases AGC’s capital base and policyholders’ surplus, and the transaction is accretive to Assured Guaranty’s earnings, operating shareholders’ equity and adjusted book value.”