According to the merger deal, the transaction comprises $60m of cash, $25m of WAC stock and a $35m seller MSR note.
The $120m transaction value represents approximately 2.6x RMS’ expected 2012 EBITDA, or 4.1x its 2012 expected core earnings.
According to the purchaser, the acquisition represents an extension to Walter Investment’s fee-for-service business model.
Walter Investment chairman and CEO Mark O’Brien said, "The sector has very attractive long-term growth prospects and is currently undergoing significant structural change, providing us with an opportunity to capitalize on those dynamics."
The deal is anticipated to complete during the fourth quarter of 2012, after receiving regulatory approval and other closing conditions.
Morgan Stanley & Co provided financial advicer and Simpson Thacher & Bartlett offered legal counsel to Walter Investment, while Keefe, Bruyette & Woods, acted as financial advisor to RMS, with Allen Matkins Leck Gamble Mallory & Natsis, Weiner Bodsky Sidman Kider, and Dechert offering legal counsel.
RMS, based in Texas, US, offers a wide suite of services to the reverse mortgage sector, including servicing, loan origination, asset management and technology.
