Reverse Mortgage Solutions parent company Walter Investment Management Corp. (NYSE: WAC) today announced it has completed a deal to acquire Security One Lending under terms previously announced in January.
The agreement was signed December 31, subject to regulatory and change of control approvals, which have since been met. Walter agreed at the time to a purchase price of up to $31 million with RMS seeing the acquisition as an opportunity to grow its origination business both in the addition of retail and wholesale channels to RMS’s current operations.
“We believe S1L’s management team is among the best in the reverse mortgage sector and has a strong vision and strategic growth plan. The entire team is highly respected in the industry and we anticipate that they will contribute to the firm’s goal of being a leading service provider to our origination force and our
broker partners,” said Mike Kent, Executive Vice President of RMS. “Additionally, there is a strong cultural alignment between the two firms which we believe will contribute to a smooth integration of the businesses.”
The purchase price outlined in January 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.
Through the deal, WAC acquires a the 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.
“We are pleased to be able to leverage the access to capital that Walter Investment can provide and believe our ability to combine expertise and resources with RMS and its management team places S1L and our employees in the very best position to compete within the reverse mortgage sector,” said Torrey Larsen,
President of S1L. “RMS’s investment in the company and its industry resources will enable S1L to maintain its position as a dominant originator in the reverse mortgage space.”
The deal is the second recent reverse mortgage acquisition for WAC, which acquired Reverse Mortgage Solutions, a servicer and issuer of reverse mortgages for $122 million in November 2012. The company also acquired more than $12 billion in servicing rights from Wells Fargo—comprising 79,000 reverse mortgage loans in early 2013.
Written by Elizabeth Ecker