RED BANK, N.J., Nov. 3, 2014 /PRNewswire/ -- ZAIS Financial Corp. (NYSE: ZFC) ("ZAIS Financial" or "the Company") today announced that it has completed its acquisition of GMFS, LLC ("GMFS") pursuant to the merger agreement which was announced on August 6, 2014.
"We are pleased to have completed the GMFS acquisition within the targeted timeframe and look forward to adding this proprietary sourcing platform to ZFC's operations," commented Michael Szymanski, Chief Executive Officer of ZAIS Financial. "We see great opportunities to expand GMFS's product offerings and at the same time create attractive investment opportunities for ZFC's portfolio. We expect the transaction to be accretive to earnings in 2015 and a key strategic element of ZFC's long-term performance."
GMFS is a privately-owned mortgage company that originates residential mortgage loans, primarily in the southern U.S., and retains the servicing rights on those mortgages. Founded in 1999, GMFS is headquartered in Baton Rouge, LA and is licensed as a mortgage banker in 29 states. GMFS originated approximately $991 million in mortgage loans for the nine months ended September 30, 2014 and $1.4 billion for the full year 2013.
GMFS is an approved Fannie Mae Seller-Servicer, Freddie Mac Seller-Servicer, Ginnie Mae issuer, Department of Housing and Urban Development ("HUD") / Federal Housing Administration ("FHA") Mortgagee, U.S. Department of Agriculture ("USDA") approved originator and U.S. Department of Veterans Affairs ("VA") Lender. GMFS currently originates loans that are eligible to be purchased, guaranteed or insured by Fannie Mae, Freddie Mac, FHA, VA and USDA through retail, correspondent and broker channels. GMFS also originates and sells reverse mortgage loans as part of its existing operations.
While subject to a final reconciliation of October 31, 2014 values, the preliminary purchase price was approximately $62.8 million at closing. This closing payment included the fair market value of GMFS's MSR portfolio at October 31, 2014, estimated at $34.8 million, and the actual value of GMFS's net tangible assets at closing. In addition to cash paid at closing, two contingent $1 million deferred premium payments payable in cash over two years, plus potential additional consideration based on future loan production and profits will be payable over a four year period if certain conditions are met. The $2 million of deferred premium payments is contingent on GMFS remaining profitable and retaining certain key employees. The additional contingent consideration is dependent on GMFS achieving certain profitability and loan production goals and is capped at $20 million. Up to 50% of the additional contingent consideration may be paid in common stock of the Company, at the Company's option. ZFC funded the closing cash payment through a combination of available cash and the liquidation of a portion of its non-agency RMBS portfolio.
ABOUT ZAIS FINANCIAL CORP.
ZAIS Financial Corp. is a real estate investment trust ("REIT") which originates, invests in, finances and manages a diversified portfolio of residential mortgage assets, other real estate-related securities and financial assets. The Company is externally managed and advised by ZAIS REIT Management, LLC, a subsidiary of ZAIS Group, LLC. Additional information can be found on the Company's website at www.zaisfinancial.com.
This press release contains statements that constitute "forward-looking statements," as such term is defined in Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended, and such statements are intended to be covered by the safe harbor provided by the same. These statements are based on management's current expectations and beliefs and are subject to a number of trends and uncertainties that could cause actual results to differ materially from those described in the forward-looking statements; the Company can give no assurance that its expectations will be attained. Factors that could cause actual results to differ materially from the Company's expectations include, but are not limited to, changes in future loan production; the Company's ability to retain certain key managers of GMFS; the Company's ability to integrate GMFS's operations; availability of suitable investment opportunities; changes in interest rates; changes in the yield curve; changes in prepayment rates; the availability and terms of financing; general economic conditions; market conditions; conditions in the market for mortgage-related investments; legislative and regulatory changes that could adversely affect the business of the Company or GMFS; and other factors, including those set forth in the Risk Factors section of the Company's Annual Report on Form 10-K filed on March 13, 2014 and other reports filed by the Company with the Securities and Exchange Commission (the "SEC"), copies of which are available on the SEC's website, www.sec.gov. The Company undertakes no obligation to update these statements for revisions or changes after the date of this release, except as required by law.
SOURCE ZAIS Financial Corp.
Related Links
WANT YOUR COMPANY'S NEWS FEATURED ON PRNEWSWIRE.COM?
Newsrooms &
Influencers
Digital Media
Outlets
Journalists
Opted In
Share this article