Acquisition of Leading Mortgage Servicing
Platform to Drive Substantial Value Creation for Shareholders
WMIH Corp. (NASDAQ: WMIH) (“WMIH”) and Nationstar Mortgage
Holdings Inc. (NYSE: NSM) (“Nationstar”) with its flagship brand
Mr. Cooper® today announced that they have entered into a
definitive merger agreement.
Nationstar combines mortgage servicing with a fully integrated
loan originations platform, supported by its Xome® business, which
provides services spanning the real estate and mortgage markets.
With more than three million customers, Nationstar has made
significant investments in its team, new technology and processes
to ensure customers have a caring, transparent and seamless
experience. As the largest non-bank servicer in the U.S., under its
Mr. Cooper brand, Nationstar is uniquely positioned for growth in a
highly addressable and extremely healthly housing market.
WMIH Corp. is a publicly-traded company focused on identifying
and consummating an accretive acquisition transaction across a
broad array of industries, with a primary focus on the financial
institutions sector. In addition to certain legacy reinsurance
assets and non-recourse run-off liabilities, WMIH has approximately
$600 million in cash and cash equivalents and federal net operating
loss carry forwards of approximately $6.0 billion that are not
subject to any annual use limitation and will not begin to expire
until 2032. WMIH’s shareholders include a number of
institutional investors, the largest of which is KKR.
“Nationstar aligns perfectly with our acquisition strategy and
has a strong track record of providing mortgage servicing and loan
and real estate offerings in various market conditions,” said Bill
Gallagher, Chief Executive Officer of WMIH. “Nationstar’s talented
and experienced management team, best-in-class servicing platform,
and continued investments in customer education and self-service
position it for growth across channels and services. We look
forward to working with Nationstar’s talented team to build on the
Company’s strong foundation to drive growth, expand the platform
and create shareholder value. The combined company is expected to
benefit from WMIH’s platform and financial attributes, which are
expected to enhance free cash flow available to support business
growth and be accretive to shareholders’ equity.”
Jay Bray, Chief Executive Officer and Chairman of Nationstar,
said, “We expect this merger to create value for our shareholders
in both the near and long-term, including immediate accretion on a
cash EPS basis and a cash premium for those of our stockholders who
elect to receive the cash merger consideration. I am passionately
committed to continuing and accelerating our growth and investment
as a leader in our industry, leveraging our best-in-class
integrated servicing and originations platform. The Nationstar
Board and management team have taken considerable steps to make
homeownership simpler and more rewarding for our three million
customers and we look forward to identifying additional
opportunities to enhance value for the combined company’s
shareholders.”
Integration Details
The operating business will retain the Nationstar Mortgage name
and Dallas Headquarters and, at least initially, be traded on the
NASDAQ under the ticker symbol “WMIH”. Nationstar’s operations will
continue as normal and its valued employees will join the combined
enterprise. Nationstar’s senior leadership team will lead the
combined company.
Upon completing the transaction, the combined company’s Board of
Directors will comprise 7 members, including 3 from WMIH and 4 from
Nationstar.
Details of the Transaction
Under the terms of the agreement, Nationstar shareholders may
elect to receive $18.00 in cash or 12.7793 shares of WMIH common
stock for each share of Nationstar common stock they own, subject
to an overall proration to ensure that 32% of the total outstanding
Nationstar shares are exchanged for the stock consideration. Upon
completion of the transaction, Nationstar shareholders will own
approximately 36% of the combined company and WMIH shareholders
will own approximately 64%.
The aggregate consideration payable to Nationstar shareholders
will consist of $1.2 billion in cash and WMIH shares currently
anticipated to be valued at approximately $702 million1. In
addition, approximately $1.9 billion of Nationstar’s existing
senior unsecured notes will be refinanced at closing. WMIH has
secured $2.75 billion of financing commitments in connection with
the transaction.
Upon closing the Transaction, all outstanding WMIH Series B
Preferred Stock and all outstanding warrants to purchase shares of
WMIH common stock will be converted into common stock of WMIH. The
shares issued pursuant to these conversions are included in the pro
forma ownership percentages referenced above. Holders of WMIH’s
Series B 5% Convertible Preferred Stock (the “Series B Stock”) will
receive approximately 444 million shares of common stock following
the mandatory conversion of the Series B Stock at a fixed
conversion price of $1.35 per share. Between signing and closing of
the transaction, we expect that holders of the Series B Stock will
receive approximately 21 million shares of common stock in
accordance with the terms of the Series B Stock. Finally, upon
closing of the transaction, holders of the Series B Stock also will
receive a special distribution of approximately 11 million shares
of common stock. As a result, upon consummating the transaction,
and on a pro forma basis, holders of the Series B Stock will be
expected to own approximately 477 million shares of common stock or
approximately 43% of the combined company.
Roadmap to Completion
The transaction has been unanimously approved by the Boards of
Directors of both companies and is subject to approval by the
shareholders of both companies, as well as regulatory approvals and
other customary closing conditions. An entity owned by investment
funds managed by an affiliate of Fortress Investment Group LLC,
holding approximately 68% of Nationstar’s voting shares, has
contractually agreed to support the transaction and elect cash
consideration for approximately 34 million shares, subject to
proration. KKR, which owns 24% of WMIH’s voting shares, has also
agreed to support the transaction.
The transaction is anticipated to close in the second half of
2018.
Advisors
Keefe, Bruyette & Woods, a Stifel company, and KKR Capital
Markets LLC (“KCM”) acted as financial advisors for WMIH. KCM also
acted as placement agent in connection with debt financing for the
transaction. Akin Gump Strauss Hauer & Feld LLP and Simpson
Thacher & Bartlett LLP acted as counsel for WMIH in connection
with the transaction. Citi, Morgan Stanley & Co. LLC and
Houlihan Lokey are serving as financial advisors to Nationstar,
with Debevoise & Plimpton LLP serving as legal counsel. PJT
Partners LP advised the special committee of Nationstar’s board,
with Davis Polk & Wardwell LLP serving as legal counsel.
Conference Call and Webcast
Nationstar will hold a conference call to discuss the
transaction today at 8:00 a.m. ET. The dial-in number for the
Nationstar conference call is (855) 874-2685 or (720) 634-2923 for
international callers. The participant passcode is 1899207. The
call will also be webcast live and can be accessed at the company’s
website at www.nationstarholdings.com.
WMIH will hold a conference call to discuss the transaction
today at 9:00 a.m. ET. The dial-in number for the conference call
is (866) 610-1072 or (973) 935-2840 for international callers. The
participant passcode is 6499125. The call will also be webcast live
and can be accessed at the company’s website at
www.wmih-corp.com.
About WMIH Corp.
WMIH Corp.’s (NASDAQ: WMIH), formerly known as Washington
Mutual, Inc., operations consist primarily of WM Mortgage
Reinsurance Company, Inc. ("WMMRC"), a wholly owned subsidiary of
the Company that is domiciled in Hawaii. The Company's primary
business is a legacy reinsurance business that is currently
operated in runoff mode by WMMRC. Additional information regarding
WMIH may be found at www.wmih-corp.com.
About Nationstar Mortgage Holdings Inc.
Based in Dallas, Texas, Nationstar Mortgage Holdings Inc. (NYSE:
NSM) provides quality servicing, origination and transaction-based
services related principally to single-family residences throughout
the United States. Nationstar is a recognized leader in the
mortgage industry with more than two decades of experience, and its
flagship brand, Mr. Cooper, is the largest non-bank mortgage
servicer in the nation.
IMPORTANT ADDITIONAL INFORMATION AND WHERE TO FIND IT
This communication is being made in respect of the proposed
merger transaction involving WMIH and Nationstar. WMIH intends to
file a registration statement on Form S-4 with the SEC, which will
include a joint proxy statement of WMIH and Nationstar and a
prospectus of WMIH, and each party will file other documents
regarding the proposed transaction with the SEC. Any definitive
proxy statement(s)/prospectus(es) will also be sent to the
stockholders of WMIH and/or Nationstar, as applicable, seeking any
required stockholder approval. This communication does not
constitute an offer to sell or the solicitation of an offer to buy
any securities or a solicitation of any vote or approval. Before
making any voting or investment decision, investors and security
holders of WMIH and Nationstar are urged to carefully read the
entire registration statement(s) and proxy
statement(s)/prospectus(es), when they become available, and any
other relevant documents filed with the SEC, as well as any
amendments or supplements to these documents, because they will
contain important information about the proposed transaction. The
documents filed by WMIH and Nationstar with the SEC may be obtained
free of charge at the SEC’s website at www.sec.gov. In addition,
the documents filed by WMIH may be obtained free of charge from
WMIH at www.wmih-corp.com, and the documents filed by Nationstar
may be obtained free of charge from Nationstar at
www.nationstarholdings.com. Alternatively, these documents, when
available, can be obtained free of charge from WMIH upon written
request to WMIH Corp., 800 Fifth Avenue, Suite 4100, Seattle,
Washington 98104, Attn: Secretary, or by calling (206) 922-2957, or
from Nationstar upon written request to Nationstar Mortgage
Holdings Inc., 8950 Cypress Waters Blvd, Dallas, TX 75019,
Attention: Corporate Secretary, or by calling (469) 549-2000.
WMIH and Nationstar and certain of their respective directors
and executive officers may be deemed to be participants in the
solicitation of proxies from the shareholders of WMIH and/or
Nationstar, as applicable, in favor of the approval of the merger.
Information regarding WMIH’s directors and executive officers is
contained in WMIH’s Annual Report on Form 10-K for the year ended
December 31, 2016, its Quarterly Report on Form 10-Q for the
quarterly periods ended March 31, 2017, June 30, 2017 and September
30, 2017 and its Proxy Statement on Schedule 14A, dated April 18,
2017, which are filed with the SEC. Information regarding
Nationstar’s directors and executive officers is contained in
Nationstar’s Annual Report on Form 10-K for the year ended December
31, 2016, its Quarterly Report on Form 10-Q for the quarterly
periods ended March 31, 2017, June 30, 2017 and September 30, 2017,
and its Proxy Statement on Schedule 14A, dated April 11, 2017,
which are filed with the SEC. Additional information regarding the
interests of those participants and other persons who may be deemed
participants in the transaction may be obtained by reading the
registration statement(s) and the proxy statement(s)/prospectus(es)
and other relevant documents filed with the SEC when they become
available. Free copies of these documents may be obtained as
described in the preceding paragraph.
Forward-Looking Statements
This press release contains forward-looking statements within
the meaning of the Private Securities Litigation Reform Act of 1995
including, but not limited to, WMIH’s and Nationstar’s expectations
or predictions of future financial or business performance or
conditions. All statements other than statements of historical or
current fact included in this press release that address
activities, events, conditions or developments that we expect,
believe or anticipate will or may occur in the future are
forward-looking statements. Forward-looking statements give our
current expectations and projections relating to our financial
condition, results of operations, plans, objectives, future
performance and business and these statements are not guarantees of
future performance. Forward-looking statements may include the
words “anticipate,” “estimate,” “expect,” “project,” “intend,”
“plan,” “believe,” “strategy,” “future,” “opportunity,” “may,”
“should,” “will,” “would,” “will be,” “will continue,” “will likely
result,” and similar expressions. Such forward-looking statements
involve risks and uncertainties that may cause actual events,
results or performance to differ materially from those indicated by
such statements. Certain of these risks are identified and
discussed in WMIH’s Form 10-K for the year ended December 31, 2016
under Risk Factors in Part I, Item 1A and Nationstar’s Form 10-K
for the year ended December 31, 2016 under Risk Factors in Part I,
Item 1A. These risk factors will be important to consider in
determining future results and should be reviewed in their
entirety. These forward-looking statements are expressed in good
faith, and WMIH and Nationstar believe there is a reasonable basis
for them. However, there can be no assurance that the events,
results or trends identified in these forward-looking statements
will occur or be achieved. Forward-looking statements speak only as
of the date they are made, and neither WMIH nor Nationstar is under
any obligation, and expressly disclaim any obligation, to update,
alter or otherwise revise any forward-looking statement, except as
required by law. Readers should carefully review the statements set
forth in the reports, which WMIH and Nationstar have filed or will
file from time to time with the SEC.
In addition to factors previously disclosed in WMIH’s and
Nationstar’s reports filed with the SEC and those identified
elsewhere in this press release, the following factors, among
others, could cause actual results to differ materially from
forward-looking statements or historical performance: ability to
meet the closing conditions to the merger, including approval by
shareholders of WMIH and Nationstar on the expected terms and
schedule and the risk that regulatory approvals required for the
merger are not obtained or are obtained subject to conditions that
are not anticipated; delay in closing the merger; failure to
realize the benefits expected from the proposed transaction; the
effects of pending and future legislation; risks associated with
investing in real estate assets and changes in interest rates;
risks related to disruption of management time from ongoing
business operations due to the proposed transaction; business
disruption following the transaction; macroeconomic factors beyond
WMIH’s or Nationstar’s control; risks related to WMIH’s or
Nationstar’s indebtedness and other consequences associated with
mergers, acquisitions and divestitures and legislative and
regulatory actions and reforms.
Annualized, pro forma, projected and estimated numbers are used
for illustrative purpose only, are not forecasts and may not
reflect actual results.
1 WMIH stock closed at $0.77 on February 9, 2018. The valuation
set forth above, which would result in a pro forma per share
equating to $22.39 per NSM rollover share, is calculated based on
NSM 2018E EPS consensus of $2.18 adjusted for anticipated
incremental debt expense in the transaction, federal net operating
loss carry forward utilization and five year average NSM price to
equity multiple of 8.7x, adjusted for the implied exchange ratio in
the transaction. These assumptions are subject to risks and
uncertainties that may cause the pro forma per share price to
differ, potentially materially, from $22.39 per share, which could
cause the actual aggregate value of WMIH shares received by
Nationstar shareholders to be potentially greater than or
materially less than $702 million.
View source
version on businesswire.com: http://www.businesswire.com/news/home/20180213005465/en/
For WMIH Corp.Joele FrankAndrew Siegel / Aaron Palash,
212-355-4449orFor NationstarMegan Portacci, 469-426-3118
Nationstar Mortgage Holdings (NYSE:NSM)
Historical Stock Chart
From May 2024 to Jun 2024
Nationstar Mortgage Holdings (NYSE:NSM)
Historical Stock Chart
From Jun 2023 to Jun 2024