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Altisource sells off financial services business, majority of real estate assets

Financial services business, which includes Nationwide Credit, sold for $44 million

The winds of change continue to blow at Altisource Portfolio Solutions as the company announced Monday that it has sold off its financial services business and the majority of its single-family real estate assets in separate deals.

Earlier this year, Altisource said that it agreed to sell its financial services business to Transworld Systems, a provider of accounts receivable management, healthcare revenue cycle and loan servicing solutions, for $44 million.

That deal is now complete, with the sale closing on Monday.

Altisource’s financial services business includes Nationwide Credit, a provider of collections, customer relationship management and call center outsourcing for the financial, retail credit, mortgage servicing, insurance, utility, and hospitality industries.

Nationwide Credit has approximately 2,300 employees and operations centers in the United States, India, and the Philippines.

According to the companies, Transworld was to pay $44 million to acquire Altisource’s financial services business. The deal consists of an up-front payment of $40 million, and an additional payment of $4 million that is to be paid on the one-year anniversary of the sale closing.

But that’s not the only deal that Altisource closed recently.

The company also announced Monday that it closed on the sale of the “majority of its remaining short-term investments in real estate.” This sale is part of the company’s exit from the home buying business, which the company announced late last year.

At the time, Altisource said that planned to discontinue its “Buy-Renovate-Lease-Sell” business, which focuses on buying, renovating, leasing, and selling single-family homes to real estate investors.

As part of that move, Altisource is selling the vast majority of the homes it owned to Lafayette Real Estate for approximately $39 million, minus closing costs.

According to Altisource, including this sale and other sales, the company now only has two homes remaining to be sold.

Altisource said that it is using the proceeds from both the sale to Transworld and the sale to Lafayette to pay down some of its senior secured term loan.

Beyond those moves, the company has also begun selling off some of it shares of Front Yard Residential, the company formerly known as Altisource Residential.

According to Altisource, the company has sold 565,757 shares of Front Yard stock for approximately $6.48 million. The company also expects to use the proceeds from this sale to pay down its senior loan.

The company currently estimates it will recognize a net pretax gain of approximately $17 million from the sale of the financial services business and the real estate assets. After paying down part of the senior loan, the pro-forma outstanding balance of the loan will be approximately $295 million.

“We are pleased to close these two transactions and to start selling our investment in RESI stock,” Altisource Chairman and CEO William Shepro said. “We believe these sales will create value for shareholders by streamlining our organization, reducing outstanding debt and increasing management’s focus on our larger fee-based opportunities in the mortgage and real estate space.”

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