New Residential Investment Corp. (NYSE:NRZ; together with its
subsidiaries, “New Residential” or the “Company”) announced today
that it has entered into definitive agreements to acquire
Shellpoint Partners LLC (“Shellpoint”), a vertically integrated
mortgage platform with established origination and servicing
capabilities, for approximately $190 million, subject to certain
adjustments, plus potential additional consideration pursuant to a
three-year earnout based on the performance of Shellpoint after
closing.
Shellpoint is an approved Fannie Mae and Freddie Mac seller and
servicer and a Ginnie Mae issuer, with servicer ratings from
S&P, Moody’s and Fitch. With a servicing portfolio totaling
approximately $50 billion(1) and annual origination volume of
approximately $6.6 billion(2), Shellpoint is an experienced,
customer-centric mortgage operator positioned for growth.
The transactions have been approved by the board of directors of
each company. Consummation of the Shellpoint acquisition is
expected to occur in two stages:
I. Settlements on Approximately $8 Billion
UPB of Fannie Mae & Freddie Mac Mortgage Servicing Rights
(“MSRs”) - As part of the acquisition, New Residential will
first settle on approximately $8 billion UPB of Fannie Mae and
Freddie Mac MSRs from Shellpoint. Between such settlements and the
closing of the corporate acquisition described below, the $8
billion UPB of Agency MSRs will be subserviced by Shellpoint. The
MSR purchases are expected to close in January 2018 and are subject
to GSE (Government-Sponsored Enterprise) and other regulatory
approvals and other customary closing conditions.
II. Closing of Corporate Acquisition of
Shellpoint - In the second stage of the acquisition, New
Residential will acquire 100% of the outstanding equity interests
of Shellpoint. The corporate acquisition is expected to close in
the first half of 2018, subject to receipt of regulatory approvals
and certain third party consents and satisfaction of certain other
closing conditions.
“We are extremely pleased to announce the agreements to acquire
Shellpoint” said Michael Nierenberg, Chief Executive Officer of New
Residential. “Shellpoint’s origination and servicing platforms
provide New Residential with recapture capabilities that can help
enhance returns on our existing MSR portfolio and create new
complementary revenue channels. In addition, as a rated servicer,
we believe Shellpoint will provide added servicing capacity to
further diversify our servicing relationships and help accelerate
transfer timelines for our MSR purchases.
This is truly an exciting next step for New Residential and we
look forward to working closely with the Shellpoint management
team. We are optimistic that Shellpoint’s business will be a strong
contributor to our existing investments and will further enhance
our ability to continue generating attractive returns for our
shareholders.”
Bruce Williams, Co-Chief Executive Officer of Shellpoint
commented, “We are extremely excited to work with the New
Residential team as Shellpoint embarks on this new chapter. We
believe this is a very compelling transaction for Shellpoint, its
employees and partners. Being part of the New Residential platform
will present unique opportunities that allow us to further enhance
our operations and scale our business with dedicated capital.”
Advising New Residential on the acquisition are Skadden, Arps,
Slate, Meagher & Flom LLP, Bradley Arant Boult Cummings LLP and
Hunton & Williams LLP as legal advisors. Advising Shellpoint on
the transaction are Houlihan Lokey Capital, Inc. as financial
advisor and Sheppard, Mullin, Richter & Hampton LLP, Dentons US
LLP and Buckley Sandler LLP as legal advisors.
Conference Call & Additional Information
Management will host a conference call on Wednesday, November
29, 2017 at 10:00 A.M. Eastern Time to discuss the acquisition. All
interested parties are welcome to participate on the live call. The
conference call may be accessed by dialing 1-866-393-1506 (from
within the U.S.) or 1-281-456-4044 (from outside of the U.S.) ten
minutes prior to the scheduled start of the call; please reference
“New Residential Investor Call.”
A telephonic replay of the conference call will also be
available two hours following the call’s completion through 11:59
P.M. Eastern Time on Wednesday, December 13, 2017 by dialing
1-855-859-2056 (from within the U.S.) or 1-404-537-3406 (from
outside of the U.S.); please reference access code “3899418.”
Prior to the conference call, the Company expects to post a
presentation about the transaction in the Investor Relations
section of its website, www.newresi.com.
(1) Shellpoint servicing portfolio as of October 31, 2017, and
includes an owned portfolio of approximately $15 billion.
(2) Shellpoint’s annual origination volume is based on its last
twelve months origination production.
CAUTIONARY NOTE REGARDING FORWARD-LOOKING STATEMENTS
Certain information in this press release constitutes
“forward-looking statements” within the meaning of the Private
Securities Litigation Reform Act of 1995, including, but not
limited to (i) statements regarding Shellpoint's future
performance, including its ability to grow, (ii) the ability to
obtain all required approvals and consummate the Shellpoint
transactions on a timely basis or at all, and (iii) statements
regarding Shellpoint's impact on the Company's business and future
performance. These statements are not historical facts. They
represent management’s current expectations regarding future events
and are subject to a number of risks and uncertainties, many of
which are beyond our control, which could cause actual results to
differ materially from those described in the forward-looking
statements. Accordingly, you should not place undue reliance on any
forward-looking statements contained herein. For a discussion of
some of the risks and important factors that could affect such
forward-looking statements, see the sections entitled “Cautionary
Statements Regarding Forward Looking Statements,” “Risk Factors”
and “Management’s Discussion and Analysis of Financial Condition
and Results of Operations” in the Company’s annual and quarterly
reports filed with the SEC, which are available on the Company’s
website (www.newresi.com). These risks and factors include, but are
not limited to, the risks relating to the Shellpoint transactions,
including in respect of the satisfaction of closing conditions and
the timing thereof; unanticipated difficulties financing the
transactions; unexpected challenges related to the integration of
the Shellpoint businesses and operations; changes in general
economic and/or industry specific conditions; difficulties in
obtaining governmental and other third party consents in connection
with the transactions; unanticipated expenditures relating to or
liabilities arising from the transactions or the acquired
businesses; Shellpoint's ability to service MSRs pursuant to
agreements entered into in connection with the transactions;
uncertainties as to the timing of the transactions; litigation or
regulatory issues relating to the transactions, Shellpoint, the
Company or the acquired businesses; the impact of the transactions
on relationships with, and potential difficulties retaining,
employees, customers and other third parties; and the inability to
obtain, or delays in obtaining, expected benefits from the
transactions. New risks and uncertainties emerge from time to time,
and it is not possible for New Residential to predict or assess the
impact of every factor that may cause its actual results to differ
from those contained in any forward-looking statements. In
addition, risks and uncertainties to which Shellpoint's business is
subject could affect the transactions and, following the closing of
the transactions, the Company will be subject to such risks and
uncertainties (including certain risks and uncertainties that
currently apply to the Company and certain new risks and
uncertainties applicable to Shellpoint). Forward-looking statements
contained herein speak only as of the date of this press release,
and New Residential expressly disclaims any obligation to release
publicly any updates or revisions to any forward-looking statements
contained herein to reflect any change in New Residential's
expectations with regard thereto or change in events, conditions or
circumstances on which any statement is based.
ABOUT NEW RESIDENTIAL
New Residential focuses on opportunistically investing in, and
actively managing, investments related to residential real estate.
The Company primarily targets investments in mortgage servicing
related assets and other related opportunistic investments. New
Residential is organized and conducts its operations to qualify as
a real estate investment trust (“REIT”) for federal income tax
purposes. The Company is managed by an affiliate of Fortress
Investment Group LLC (NYSE: FIG), a global investment management
firm.
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New Residential Investment Corp.Investor Relations,
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