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Walter Investment Management Corp. Announces Definitive Agreement To Acquire Security One Lending

TAMPA, Fla., Jan. 2, 2013 /PRNewswire/ -- Walter Investment Management Corp. (NYSE MKT: WAC) ("Walter Investment" or the "Company") announced the signing on December 31, 2012 of a definitive agreement to acquire 100% of the stock of Security One Lending ("S1L") in a transaction valued at up to $31 million.  The purchase price consists of $20 million in cash paid at the time of signing and up to an $11 million additional earn out to be paid upon the achievement by S1L of certain designated performance targets over the next twelve months.  Closing is contingent upon the receipt or waiver of required regulatory approvals and other consents.  Based on a full $31 million purchase price and estimated results pro forma for expected synergies with the Company's Reverse Mortgage Solutions subsidiary ("RMS"), the acquisition represents a 2x multiple of 2012 EBITDA and approximately 1x 2013 estimated EBITDA. The transaction is expected to be immediately accretive to Walter Investment.

S1L, based in San Diego, California is owned by management, independent investors and in part by funds managed by Jacobs Asset Management, LLC.  S1L is a retail and wholesale reverse mortgage loan originator that has been increasing its presence in the reverse mortgage origination space since its inception in November of 2006. During 2012, S1L originated nearly 5,000 reverse mortgage loans with an aggregate unpaid principal balance of over $700 million.  RMS has a long-standing relationship with S1L, as S1L has been delivering loans using RMS's technology and RMS has acquired more than 60% of S1L's reverse origination production during 2012.  The strategic acquisition of S1L will enhance RMS's position as the leading issuer of reverse mortgage product in the sector, while also significantly increasing RMS's retail origination presence. 

Mark J. O'Brien, Chairman and CEO of Walter Investment said, "We are extremely pleased to add the S1L business to the Walter Investment portfolio.  This addition is a key step in achieving our previously stated goal to increase the retail mix of RMS's originations business.  S1L has developed a robust retail and wholesale origination presence in the reverse mortgage market, with 20 branches and nearly 400 loan officers in the field, which we believe provides an attractive complement to the already strong correspondent origination program at RMS.  This acquisition creates a combined platform with diverse, established originations channels without significant overlap.  Additionally, S1L is managed by a seasoned team with deep experience in both the reverse and forward mortgage spaces, which adds significant depth to the existing RMS management structure."

"We continue to believe the reverse mortgage sector has very attractive long-term growth prospects," continued O'Brien, "and believe S1L is uniquely positioned to help us capitalize on these prospects by capturing greater market share in the coming year. We anticipate that the pooled strengths of our businesses will enhance our ability to take advantage of these opportunities."

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