Radian Group Inc. has announced the sale of Clayton Services LLC to Covius Holdings. Clayton Services, acquired by Radian as part of Clayton Holdings, provides loan acquisition, RMBS securitization and distressed asset reviews and servicer and loan surveillance services.
Terms of the transaction were not disclosed. The company does not expect the sale of Clayton Services to have a material net impact on Radian’s future financial results but does anticipate that for Q4 2019 it will record a pre-tax, non-cash impairment of goodwill and other acquired intangible assets of approximately $18.5 million related to this transaction without reference to other factors affecting its fourth quarter results.
“The driving force behind all that we do at Radian is our focus on our core mortgage and real estate capabilities and our commitment to serving the strategic needs of our clients,” said Radian CEO Rick Thornberry. “We continually evaluate and refine the strategic solutions that we offer across the mortgage and real estate value chain, and part of that evaluation means making adjustments when necessary. We will continue to focus on building our core mortgage and real estate products and services through a data-driven, digital transformation that has come to define our One Radian strategy.”
In addition to its core Mortgage Insurance and Risk Services businesses, Radian will maintain all of the services and products offered through Green River Capital, Red Bell Real Estate, Five Bridges Advisors, Radian Title Insurance, and Radian Settlement Services.
"These companies remain important contributors to Radian’s growing Real Estate Services business," Radian states.
Approximately 550 employees supporting Clayton Services will join the Covius team. Thornberry added, “We are very proud of our Clayton Services team for their hard work and dedication on behalf of Radian and wish them continued success as part of the Covius organization.”
“Clayton is one of the most recognized brands in capital markets and mortgage securitization," said Rob Clements, Chairman and CEO of Covius Holdings. "This transaction will significantly expand the offerings and presence of Covius in those sectors. Clayton will be a core business for Covius. We intend to invest the capital and resources to grow Clayton’s market share and build the technology required by the increasingly digital processes of the origination and secondary markets.”
John Surface, President and COO of Covius Holdings, added: “This acquisition aligns well with what we have been building at Covius over the past two years. Our current due diligence capabilities, our expanded solutions set and our deep experience in review valuations, title curative services and compliance will all support and enhance Clayton engagements. This significantly increases our scale, scope and operational capacity to serve new and existing clients. We are pleased to welcome Clayton clients and associates.”