Real estate investment trust Rithm Capital Corp has entered into a definitive agreement to acquire Computershare Mortgage Services Inc. for about $720 million, the companies announced Monday. The deal includes the purchase of Specialized Loan Servicing LLC.
The deal represents the second major acquisition that New York-based Rithm, which operates NewRez, Caliber and other businesses, has announced in the past three months. In July, the company struck a deal to acquire Sculptor Capital Management Inc. for $639 million, leading to a dispute among the shareholders at the asset management firm.
Rithm’s deal with Computershare will add a mortgage servicing rights (MSR) portfolio of about $136 billion in unpaid principal balance (UPB) to the company. It includes $85 billion in third-party servicing and the Specialized Loan Servicing’s MSR portfolio.
“Our track record of acquisitions in the mortgage servicing space continues to deliver value not only for our shareholders but also for the millions of consumers we serve,” Michael Nierenberg, chairman, CEO and president of Rithm Capital, said in a statement.
Rithm expects to conclude the acquisition in the first half of 2024.
Following the deal’s closing, Specialized Loan Servicing portfolio and operations will be under Newrez, the 8th largest U.S. mortgage lender in the first six months of 2023, with a production of $17 billion in loans, per Inside Mortgage Finance data.
Newrez was also the fifth largest company in owned mortgage servicing in the second quarter, with a $540 billion MSR portfolio. Computershare Loan Services was No. 36, with $53 billion in total, according to the IMF data.
Rithm intends to use a mix of existing cash, available liquidity on the balance sheet and additional MSR financing to close the Computershare deal.
Rithm had 1.8 billion of total cash and liquidity to support its acquisitions at the end of the second quarter. From April to June, Rithm delivered a $357.4 million GAAP net income — higher than the $68.9 million the prior quarter.
So far this year, the company has also invested $145 million to purchase $1.4 billion of consumer loans from Goldman Sachs and purchased 371 newly built single-family rental properties from Lennar.