Nationstar Mortgage, Inc. (NYSE: NSM) on Tuesday announced a nearly $4 billion merger with WMIH Corp. (NASDAQ: WMIH), the successor company to former banking giant Washington Mutual, Inc.
The Coppell, Texas-based Nationstar — which services reverse mortgages through its Champion Mortgage arm — will emerge as the nominal survivor of the deal, with CEO Jay Bray staying at the helm and the company remaining in North Texas. Champion will also continue to operate under its own name, the company announced, and the consumer-facing “Mr. Cooper” brand name will be used for its forward mortgage servicing and origination businesses.
“WMIH has great respect for the company we’ve built, for our incredible team, and for our culture, and when they made a compelling case that we would be stronger together, we agreed,” Bray said in an e-mail to employees.
The $3.8 billion price tag on the transaction includes $1.2 billion in cash, $1.9 billion in debt, and a 36% pro forma ownership stake for WMIH. The combined company will also trade on the NASDAQ under WMIH’s existing ticker symbol once the deal closes sometime in the second half of 2018.
Nationstar has been the subject of sale talks since last fall, when Bloomberg reported that majority owner Fortress Investment Group (NYSE: FIG) was accepting bids.
The Seattle-based WMIH Corp. emerged in 2012 from the bankruptcy of Washington Mutual, which failed in 2008 amid the financial crisis. The company’s collapse was the largest bank failure in U.S. history.
NSM stock slid slightly in the wake of the deal, trading down 1.41% or $0.24 by midday to reach about $16.83 per share; WMIH stock had more than doubled to $1.24, up $0.45 at the same time.
Written by Alex Spanko