Walter Investment Management Corp. (WAC) entered into a purchase agreement with Green Tree servicing, d.b.a. GTCS Holdings Monday as the Tampa, Fla.-based real estate investment trust looks to expand its business into special servicing. The deal, priced at $1.065 billion, was unanimously approved by the Walter board of directors, and is expected to close in the third quarter of 2011. Walter Investment will issue about $1.8 million shares of common stock to GTCS' seller, as well as assume $20 million of the acquired company's existing debt. Walter is using $765 million in cash from Credit Suisse and The Royal Bank of Scotland to complete the purchase transaction. GTCS Holdings is an independent, fee-based servicer that specializes in high-touch, third-party servicing of credit-sensitive consumer loans. The St. Paul, Minn.-based company currently services a $37 billion portfolio of more than 745,000 loans, including residential mortgages. Through the acquisition Walter Investment will relinquish its status as a REIT, as some of the scope of Green Tree's services are outside of real estate. But executives from both firms are optimistic about the transaction and future prospects under the deal. "We believe that with the acquisition of Green Tree, Walter Investment will be uniquely positioned to capture a significant share of the growing specialty mortgage services sector," said Mark O'Brien, Walter Investment's chairman and chief executive officer. "Green Tree has demonstrated its ability to capitalize on the cyclical and secular trends in the mortgage sector which we believe offer great opportunities for significant revenue growth." Green Tree's CEO Keith Anderson said the merge will give both companies a substantial competitive advantage. "By combining with Walter Investment, we will be able to operate within a larger and stronger capital base, enhancing our ability to execute our strategic objectives and meet our long-term financial goals," Anderson commented. Walter Investment Management is an asset manager, mortgage servicer and portfolio owner with about $1.8 billion under current management. Credit Suisse Securities, Morgan Stanley & Co. (MS) and Bank of America Merrill Lynch acted as advisors on the Green Tree deal. Write to Christine Ricciardi. Follow her on Twitter @HWnewbieCR. Disclosure: The author holds no relevant investments.