JERSEY CITY, N.J., July 30, 2013 /PRNewswire/ -- KCG Holdings, Inc. (NYSE: KCG) today announced it has entered into an agreement to sell subsidiary Urban Financial Group (Urban) to an investor group led by Brian Libman. The transaction is expected to be completed in the fourth quarter of 2013 and generate total proceeds of approximately $80 million to KCG representing a combination of cash consideration and retained net assets.
Urban is one of the largest originators of home equity conversion mortgages (HECM), also referred to as reverse mortgages, in the U.S. The company is headquartered in Tulsa, OK and licensed to operate in 43 states and 3 territories. In addition, Urban is an approved issuer under the Government National Mortgage Associate (GNMA) HECM Mortgage-Backed Securities (HMBS) program.
Brian Libman commented, "Urban Financial Group is well-positioned to capitalize on the significant growth opportunities in the promising reverse mortgage originations market. The lender has demonstrated market share gains, operational excellence and solid growth fundamentals. I look forward to working with management to extend Urban's track record of success."
Steve McClellan, CEO of Urban, said: "The Urban management team is looking forward to working with Brian and his investor group. Urban was acquired on the strength of our team and our high level of client service and I am confident that as we work together to invest further in the business, we will be well-positioned to take advantage of the market's current and future opportunities."KCG made the decision to divest Urban after a thorough strategic review resulted in a renewed focus on core market making and agency execution services. The transaction is subject to customary closing conditions, including regulatory approvals by GNMA, the U.S. Department of Housing and Urban Development (HUD), the Federal National Mortgage Association (FNMA), and the states and territories in which Urban operates.