New Residential Investment Corporation [1] has entered into an agreement with an affiliate of Lone Star Funds [2] to acquire Caliber Home Loans Inc. [3], bringing together the platforms of Caliber and NewRez LLC [4]. Under the terms of the agreement, New Residential will pay a cash consideration of $1.675 billion to acquire Caliber.
Through the acquisition New Residential expects to broaden its customer retention efforts; enhance its purchase origination capabilities; add to its asset base with a portfolio of mortgage servicing rights (MSRs); and accelerate New Residential’s mortgage platform objectives.
“We believe this is a terrific acquisition for our company,” said Michael Nierenberg [5], Chairman, CEO, and President of New Residential. “Over the years, Caliber’s experienced team has built a differentiated purchase-focused originator with an impressive retail franchise and solid track record in customer retention. The combination of NewRez and Caliber’s platforms will create a premier financial services company with scale, talent, technologies, and products to accelerate our mortgage company objectives and generate strong earnings for our shareholders. With this acquisition, we have significantly strengthened our capabilities to perform across interest rate environments.”
Caliber reported $80 billion in unpaid principal balance (UPB) of funded origination volume in 2020. Caliber’s servicing portfolio as of December 31, 2020 featured $153 billion in UPB, with approximately 630,000 customers.
“We are excited to be joining the New Residential family,” said Sanjiv Das [6], CEO of Caliber. “By combining platforms with NewRez, we will join another industry pioneer that has complementary strengths and is committed to delivering the dream of homeownership. Our combination of strategies will allow us to accelerate our leading position in purchase lending, grow our digital direct to consumer and broker initiatives, and further propel our retail franchise. As we leverage our digitization investments, we will make the entire mortgage process faster, easier, and more efficient. We are thrilled to have the opportunity to deepen our customer relationships, expand our customer reach and provide more industry-leading products and options to our customers.”