J.G. Wentworth acquires WestStar Mortgage for $54M

WestStar closed $1.5 billion of new loan originations in last year and the deal is aimed at growing the new company's mortgage origination business even more.

The J.G. Wentworth Co, a purchaser of structured settlement payments, annuity payments, lottery payments and other receivables, has signed a stock purchase agreement to acquire WestStar Mortgage Inc. for $54 million.

WestStar is a privately-held residential mortgage company specializing in conforming mortgage lending. The deal amount represents J. G. Wentworth Class A Common Stock and a minimum of 75% of the transaction in cash.

Headquartered in the Washington, D.C. suburb of Woodbridge, Virginia, WestStar specializes in originating Conventional, VA, and FHA loans and is licensed to operate in 40 states. The firm was founded in 2000 and has over 300 employees in 15 states across the country.

In 2014, WestStar closed $1.5 billion of new loan originations, and the company sold or securitized approximately half of the loans it originated to government backed organizations and half to third party institutional investors in the secondary market. J.G. Wentworth said it believes that the transaction will be accretive to adjusted net income by 15-20% on an ongoing basis.

“Our acquisition of WestStar represents the next major step in our strategy to become a more diversified financial services company, and it provides an exciting opportunity to expand our brand and product suite to a new customer base,” Stewart A. Stockdale, CEO at J.G. Wentworth, said. “Together, we will leverage the core competencies of J.G. Wentworth, including our national brand, direct marketing abilities, call center excellence, information management and digital capabilities to drive additional mortgage originations.”

“This is an exciting step forward in the evolution and growth trajectory of our company,” Walter Jones, Chairman and CEO of WestStar Mortgage Inc., added. “Working together with the management team and capabilities at J.G. Wentworth provides an exciting vision for the future.”

WestStar will join The J.G. Wentworth Co. as a newly rebranded division under the name J.G. Wentworth Home Lending, and the division will remain in the company’s current headquarters in Woodbridge, Virginia.

The current management team, led by Walter F. Jones, Roger W. Jones, and Kathy Zimpel will focus on leveraging the many assets of J.G. Wentworth to drive growth and innovation in the mortgage business.

The acquisition is subject to customary closing conditions and regulatory approvals and is expected to be completed in the third quarter of 2015. Advisors to J.G. Wentworth were K&L Gates, KPMG and Reed Smith LLP. Firms advising WestStar were Houlihan Lokey and SheppardMullin.