The latest 2020 Home Mortgage Disclosure Act data shows Caliber ranked No. 8 in total loan volume with $70.6B in total originations for the year.
New Residential Investment Corp. announced Wednesday that it has entered into a definitive agreement with an affiliate of Lone Star Funds to acquire Caliber Home Loans, a top 10 nonbank lender.
With this acquisition, New Residential intends to bring together the platforms of Caliber and NewRez, its wholly owned mortgage originator and servicer. The company stated that the transaction is intended to close as quickly as possible, and, subject to various approvals and customary closing conditions, is targeted for the third quarter of 2021.
New Residential will pay a cash consideration of $1.675 billion for the acquisition, or about equal to the expected tangible book value at closing. New Residential intends to finance the acquisition through a mix of existing cash and available liquidity on the New Residential and Caliber combined balance sheet as well as a mix of equity and the sale of certain investment securities.
“We believe this is a terrific acquisition for our company,” Michael Nierenberg, New Residential chairman, CEO and president, said in a statement. “Over the years, Caliber’s experienced team has built a differentiated purchase-focused originator with an impressive retail franchise and solid track record in customer retention. The combination of NewRez and Caliber’s platforms will create a premier financial services company with scale, talent, technologies and products to accelerate our mortgage company objectives and generate strong earnings for our shareholders. With this acquisition, we have significantly strengthened our capabilities to perform across interest rate environments.”
The acquisition will add about $141 billion unpaid balance of mortgage service rights (MSRs) to New Residential’s portfolio.
“We are excited to be joining the New Residential family,” Caliber CEO Sanjiv Das said. “By combining platforms with NewRez, we will join another industry pioneer that has complementary strengths and is committed to delivering the dream of homeownership. Our combination of strategies will allow us to accelerate our leading position in purchase lending, grow our digital direct to consumer and broker initiatives and further propel our retail franchise.”
“As we leverage our digitization investments, we will make the entire mortgage process faster, easier and more efficient,” Das said. “We are thrilled to have the opportunity to deepen our customer relationships, expand our customer reach and provide more industry-leading products and options to our customers.”
The latest 2020 Home Mortgage Disclosure Act data shows Caliber ranked No. 8 in total loan volume with $70.6 billion in total originations for the year. This represents a volume increase of 134.4 percent from 2019. Caliber holds a recapture rate of 54 percent, and serves about 630,000 customers as of Dec. 31, 2020.
Citigroup Global Markets and Goldman Sachs acted as financial advisors to New Residential and Skadden, Arps, Slate, Meagher & Flom acted as legal advisor to New Residential. Credit Suisse Securities and Barclays acted as financial advisors to Lone Star and Caliber and Mayer Brown acted as legal advisor to Lone Star and Caliber.