Knight Capital Group, Inc. (Nasdaq: NITE), announced that it has agreed to acquire Urban Financial Group, Inc., a privately-held, independent reverse mortgage mortgage company based in Tulsa, Okla.
The acquisition will provide Knight’s fixed income team with a captive new issue pipeline of HECM mortgage-backed securities (HMBS) for institutional clients said the company in a statement. In addition, the integration of Urban Financial will allow Knight to realize a greater percentage of revenues from origination to distribution.
“Urban Financial is a growing company with a solid product offering that originates loans nationwide through branch offices and independent brokers,” said Thomas M. Joyce, Chairman and CEO, Knight Capital Group. “We’re excited by the potential to establish a steady new issue pipeline that generates healthy revenues end-to-end. In particular, reverse mortgages packaged as HMBS are popular among institutions because of the attractive rates relative to the risks involved.”
Started by Chief Executive Officer Bryan W. Hendershot in 2003, the company has 115 employees and branch offices in more than a dozen states. “We’re extremely pleased to join Knight as the enhanced capital will allow Urban Financial to increase origination activities and expand the product offering. We look forward to working with Knight’s fixed income team to build HMBS issuance,” Mr. Hendershot said.
The closing of the acquisition is subject to customary closing conditions and regulatory approvals. Terms of the deal were not disclosed. According to HUD data, Urban has endorsed 581 HECMs during FY 2010.
Note – We are interviewing Hendershot later today and will post additional comments.