New Residential, HLSS Enter Into Purchase Agreement, Terminate Merger Deal

(RTTNews) - New Residential Investment Corp. (NRZ) and Home Loan Servicing Solutions, Ltd. (HLSS) said Monday that they have entered into a purchase agreement, under which New Residential acquired substantially all of the assets, and assumed substantially all of the liabilities of Home Loan Servicing Solutions.

Simultaneously, New Residential and HLSS mutually terminated the merger agreement originally announced on February 22.

Under the asset purchase agreement, New Residential paid Home Loan Servicing Solutions an equity purchase price of about $1.2 billion, or $17.08 per HLSS share on 71 million HLSS shares. With adjustments for cash and the repayment of HLSS debt, New Residential paid HLSS a total purchase price of about $1.4 billion, comprised of about $1 billion of cash and 28.2 million newly issued shares of New Residential.

The asset purchase was approved by the Board of Directors of each company and did not require shareholder approval. The asset purchase was consummated concurrently with signing of the asset purchase agreement.

New Residential has separately agreed to a multi-year extension of the servicing contracts with Ocwen Financial Corporation (OCN), providing for a long-term partnership between New Residential and Ocwen.

Michael Nierenberg, Chief Executive Officer of New Residential, said, "When it became evident that HLSS was unable to satisfy the merger conditions as originally expected, we worked collaboratively with HLSS management to structure this Asset Purchase to meet our mutual goals."