Failed IndyMac Sells for $13.9 Billion

Updated from 01/02/2009

By Alan Zibel

WASHINGTON -- A seven-member group of investors has agreed to buy the remnants of failed lender IndyMac Bank, a symbol of the housing boom and bust, for $13.9 billion, federal regulators said Friday.

IndyMac, which specialized in loans made with little down payment or proof of assets, was seized by the government in July after a run on the bank as the U.S. housing market collapsed.

The Federal Deposit Insurance Corp. said a holding company led by Steven Mnuchin, co-chief executive of private equity firm Dune Capital Management, agreed to buy IndyMac in a deal reached Wednesday and expected to close by early next month.

The investors have formed a partnership, called IMB Management Holdings LP, that includes Dell Inc.(DELL Quote) founder Michael Dell's investment firm, MSD Capital.

Once the deal closes, the investment group would pour $1.3 billion in new capital into IndyMac and continue to operate the Pasadena, Calif-based bank, the FDIC says.

"We have assembled a group of experienced private investors in financial services to acquire the former IndyMac and operate it under new management with extensive banking experience," Mnuchin said in a statement. "We will inject significant private capital into IndyMac so that it can once again effectively serve its customers and communities."

Other investors in the partnership include five private equity firms or hedge funds: J.C. Flowers & Co.; Stone Point Capital; Paulson & Co.; a fund controlled by billionaire George Soros' Fund Management; and a fund controlled by Silar Advisors LP.