The Dallas Morning News
Caliber sells in $1.7B deal
Transaction creates nation’s 5th-largest lender for real estate
Caliber Home Loans, the Coppell-based home mortgage giant, is being sold for $1.675 billion in a consolidation play that creates the nation’s fifthlargest lender serving the stillhot real estate market.
Caliber’s owner, Dallasbased Lone Star Funds, announced the cash deal Wednesday with New Residential Investment Corp., a financial services firm headquartered in New York that operates mortgage lender and servicer Newrez.
The transaction is expected to close in the third quarter.
“We believe this is a terrific acquisition for our company,” said New Residential chairman and CEO Michael Nierenberg in a statement. “The combination of Newrez and Caliber’s platforms will create a premier financial services company with scale, talent, technologies and products.”
Later, in a conference call to discuss the deal, Nierenberg said: “This is going to really help us get back to where we were PRE-COVID, grow our earnings, grow our book value and I think create great shareholder value over time.”
Bloomberg Intelligence analyst Ben Elliott described the acquisition as a “bargain” for New Residential.
“The combined entities would service $576 billion in unpaid principal and originate $142 billion a year, collectively
the fifth-largest lender nationally, and bolster Newrez’s margins with a substantial improvement in mix, recapture rates and technology,” Elliott wrote.
Caliber reported pre-tax income of $891 million last year, just slightly less than New Residential’s pre-tax income of $934 million.
According to Housing Wire, Caliber ranked as the nation’s sixth-largest originator of home loans and refinancings in 2020.
Nierenberg told analysts that he expects the companies to function separately during the initial integration before combining operations. Executives were vague about who will run the combined company.
Caliber, led by CEO Sanjiv Das, initially filed to go public last fall but later withdrew its IPO, citing uncertain market conditions driven by a spike in COVID-19 infections and the contentious U.S. presidential election. The company employs nearly 6,000 workers.