Matrix Financial Services Corp., a wholly owned subsidiary Two Harbors Investment Corp., an Agency + MSR mortgage real estate investment trust, has entered into a definitive stock purchase agreement to acquire RoundPoint Mortgage Servicing Corp. from Freedom Mortgage Corp.
In connection with the acquisition, Matrix is paying a preliminary purchase price upon closing in an amount equal to the tangible net book value of RoundPoint, plus a premium amount of $10.5 million. This preliminary purchase price will be subject to certain additional adjustments following the closing date.
Matrix is engaging RoundPoint as a subservicer prior to the closing date and expects to begin transferring loans to RoundPoint in the fourth quarter of 2022. Upon closing, all servicing licenses and capabilities will remain with RoundPoint, and RoundPoint will become a wholly owned subsidiary of Matrix. The parties expect to close the transaction in 2023, subject to the satisfaction of customary closing conditions and the receipt of required regulatory and government-sponsored entity approvals.
“Our acquisition of RoundPoint marks an evolution in our MSR strategy which will deliver long-term financial and strategic benefits to Two Harbors,” states Bill Greenberg, Two Harbors’ president, CEO and chief investment officer. “The operational efficiencies and revenue opportunities it presents will add value for shareholders while deepening our involvement in the industry.”
The anticipated acquisition benefits to Two Harbors include incremental annual pre-tax earnings of approximately $20 million, following the transfer of the company’s mortgage servicing rights (MSR) portfolio to RoundPoint, through additional revenues and cost savings as a result of vertically integrating self-servicing capabilities. In addition, there will be greater control over the company’s MSR portfolio through self-servicing and long-term opportunities to expand upon and leverage RoundPoint’s existing platform and capabilities to pursue additional business opportunities.
“We wish RoundPoint continued success,” says Stanley C. Middleman, president and CEO of Freedom. “We’re excited about the new opportunities in store for them with Two Harbors.”
“We are very excited to partner and accelerate our growth with Two Harbors,” comments Patrick McEnerney, RoundPoint’s CEO. “The transaction recognizes the strategic value of our experienced team, robust platform, and dedication to serving our customers well.”
Cadwalader, Wickersham & Taft LLP is serving as legal advisor to Two Harbors. Hunton Andrews Kurth LLP is serving as legal advisor to Freedom and RoundPoint.