Knight Capital Group To Acquire Urban Financial Group

Knight Capital Group Inc. has agreed to acquire Urban Financial Group Inc., a privately held, independent mortgage company. An originator of direct and brokered residential mortgage loans, Tulsa, Okla.-based Urban Financial is a provider of home equity conversion mortgages (HECMs). Terms of the acquisition were not disclosed.

The acquisition will provide Knight's fixed-income team with a captive new-issue pipeline of HECM mortgage-backed securities (HMBS) for institutional clients, the group says. 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,’ explains Knight's CEO, Thomas M. Joyce. ‘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.’

Founded by CEO Bryan W. Hendershot in 2003, Urban Financial has 115 employees and branch offices in more than one dozen states. The company currently offers or purchases residential mortgage loans in more than two dozen states.

The closing of the acquisition is subject to customary closing conditions and regulatory approvals. The acquisition is expected to be cashflow positive immediately following the close and accretive to earnings per share in 2010. Upon closing, Urban Financial will operate as a wholly owned, indirect operating subsidiary of Knight Capital Group.

SOURCE: Knight Capital Group


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