New Residential to acquire Shellpoint Partners in $190 million deal

by Paolo Taruc04 Dec 2017
New Residential Investment announced has agreed to acquire Shellpoint Partners, a mortgage platform with origination and servicing capabilities.

The deal stands at about $190 million, subject to certain adjustments – plus potential additional consideration after a three-year earn-out based on the performance of Shellpoint after closing.

“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,” said New Residential CEO Michael Nierenberg. “[A]s 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.”

The transactions have been approved by the board of directors of each company. The acquisition will take place in two stages. First, New Residential will settle on approximately $8 billion UPB of Fannie Mae and Freddie Mac MSRs from Shellpoint. Second, New Residential will acquire 100% of the outstanding equity interests of Shellpoint.

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. It had a servicing portfolio totaling approximately $50 billion at the end of October, and origination volume of approximately $6.6 billion over the past year.

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