MortgageReverse

[Update] Walter Investment Management Buys Security One for Up to $31 Million

Walter Investment Management Corp (NYSE: WAC) announced on Monday it has signed an agreement to acquire all of the stock of Security One Lending (S1L) in a deal valued at up to $31 million in cash.

The purchase price consists of $20 million in cash paid at the time of signing and up to $11 million to be paid upon the achievement by S1L of designated performance parameters over the course of the next 12 months. The acquisition represents a 2X multiple of S1L’s EBITDA and approximately 1.2X projected pro forma 2013 EBITDA, according to Walter Investment.

Through the deal, WAC acquires a strong retail brand and a sales force of more than 400 originators and branches across the U.S. During fiscal year 2013, Security One Lending is the largest originator of reverse mortgages in the country, according to data from the Department of Housing and Urban Development. The company in 2012 hired more than 100 former MetLife loan originators after MetLife announced it was getting out of the reverse mortgage business.

The deal is the second reverse mortgage acquisition for WAC, which acquired Reverse Mortgage Solutions, a servicer and issuer of reverse mortgages for $122 million in November 2012.

“We are extremely pleased to add the S1L business to the Walter Investment portfolio,” said Mark J. O’Brien, Chairman and CEO of Walter Investment. “The addition is a key step in achieving our previously stated goal of increasing the retail mix of RMS originations business. This acquisition will create a combined platform with a diverse set of established originations channels without significant overlap.”

The deal is expected to close in the first quarter of 2013.

More updates as we get them.

Note: Updates have been made in paragraph one to reflect that the acquisition will be a stock transaction with WAC acquiring all of the stock of S1L. 

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