Walter Investment Management Corp (NYSEAMEX:WAC) announced on Tuesday it plans to acquire Reverse Mortgage Solutions (RMS) for $120 million.

The transaction is being funded using $60.0 million in cash, $25.0 million of WAC stock and a $35.0 million seller MSR note, according to WAC. The $120.0 million transaction value represents a multiple of approximately 2.6 times RMS’ expected 2012 EBITDA, or 4.1 times its 2012 expected core earnings.

Founded in 2007, RMS raised $11 million in investment from JAM Equity Partners, LLC, and services approximately $12.0 billion in unpaid principal balances of reverse mortgages. Based in Spring, Texas, the company has several different business channels including servicing, REO management, correspondent, wholesale, and retail.

After Wells Fargo, Bank of America, and MetLife exited the industry, RMS has significantly increased its role in facilitating the secondary market through Ginnie Mae’s HMBS program, issuing $1.1 billion of securities during the first half of 2012.

“RMS is led by a very experienced and well-respected management team and has performed exceptionally well since its inception in 2007,” said Mark J. O’Brien, Chairman and CEO of Tampa, Florida-based Walter Investment. “The sector has very attractive long-term growth prospects and is currently undergoing significant structural change, providing us with an opportunity to capitalize on those dynamics.”

WAC’s acquisition of RMS will be significantly accretive to both earnings and cash flow, and estimates that, on a pro forma basis, the acquisition would have been accretive to 2012 core earnings per share by approximately 25% had the acquisition been completed at the beginning of this year.

“We believe RMS is uniquely positioned to capitalize on this opportunity and to continue capturing greater market share in both its origination and servicing businesses. We believe the combined strengths of our businesses will enhance our ability to take advantage of these opportunities,” said O’Brien.

WAC services a diverse $82 billion loan portfolio through its subsidiary Green Tree, a full service servicer focused on turning at-risk consumer loans into performing assets.

The deal is subject to regulatory approval and is expected to close in November. RMS’ current management team will remain in place.

Editors Note: a previous version of this article stated that WAC services a portfolio of $40 billion, it’s $82 billion.