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Two Harbors Investment Corp. announces definitive agreement to acquire RoundPoint Mortgage Servicing Corporation

NEW YORK–(BUSINESS WIRE)–Two Harbors Investment Corp. (NYSE: TWO), an Agency + MSR Mortgage Real Estate Investment Trust, today announced that Matrix Financial Services Corporation, a wholly-owned subsidiary (“Matrix”), has entered into a definitive share purchase agreement for acquire RoundPoint Mortgage Servicing Corporation (“RoundPoint”) from Freedom Mortgage Corporation (“Freedom”).

In connection with the acquisition, Matrix has agreed to pay a preliminary purchase price at closing of an amount equal to RoundPoint’s tangible net book value plus a premium of $10.5 million. This preliminary purchase price will be subject to certain additional adjustments after the closing date.

Matrix has agreed to engage RoundPoint as a subcontractor prior to the closing date and expects to begin transferring loans to RoundPoint in the fourth quarter of 2022. Upon closing, all licenses and service capabilities will remain with RoundPoint, and RoundPoint will become a wholly owned subsidiary. of Matrix. The parties expect to close the transaction in 2023, subject to satisfaction of customary closing conditions and receipt of required regulatory and government-sponsored entity approvals.

Planned acquisition benefits for two ports

  • Additional annual pre-tax profit of approximately $20 million, following the transfer of the company’s Mortgage Servicing Rights (“MSR”) portfolio to RoundPoint, through additional revenue and cost savings from the vertical integration of self-service capabilities.

  • Greater control over the company’s MSR portfolio through self-service.

  • Long-term opportunities to grow and leverage RoundPoint’s existing platform and capabilities to pursue additional business opportunities.

Our acquisition of RoundPoint marks an evolution in our MSR strategy that will bring long-term financial and strategic benefits to Two Harbors,” said Bill Greenberg, President, CEO and Chief Investment Officer of Two Harbors. “The operational efficiencies and revenue opportunities it presents will add shareholder value while deepening our involvement in the industry. »

“We wish RoundPoint continued success,” said Stanley C. Middleman, president and CEO of Freedom. “We are excited about the new opportunities available to them with Two Harbors.

We are thrilled to partner and accelerate our growth with Two Harbors,” said Patrick McEnerney, president and CEO of RoundPoint. “The transaction recognizes the strategic value of our experienced team, our robust platform and our commitment to serving our customers well. »

Cadwalader, Wickersham & Taft LLP is legal counsel to Two Harbors. Hunton Andrews Kurth LLP is legal counsel to Freedom and RoundPoint.

Caution Regarding Forward-Looking Statements

This release may contain statements and information that constitute “forward-looking statements” within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. and we intend to do so. – forward-looking statements shall be qualified by the safe harbor provisions contained therein and are included in this statement for the purposes of invoking such safe harbor provisions. Forward-looking statements include statements regarding our beliefs, plans, objectives, goals, targets, expectations, anticipations, assumptions, estimates, intentions and future performance. Forward-looking statements made in this release include, but are not limited to, RoundPoint’s engagement by Matrix as a contractor prior to closing, RoundPoint’s activities and capabilities after the closing date, the expected timing of the closing of the transaction and statements on the anticipated benefits of the proposed acquisition for Two Harbors.

Forward-looking statements are not guarantees and involve risks, uncertainties and assumptions. There can be no assurance that actual results will not differ materially from our expectations. We caution investors not to place undue reliance on forward-looking statements and urge you to carefully consider the risks identified under “Risk Factors”, “Forward-Looking Statements” and “Management’s Discussion and Analysis of Financial Condition and Results of Operations” in our public filings with the SEC, which are available on the SEC’s website at www.sec.gov.

All written or oral forward-looking statements made by or attributable to us are expressly qualified by this cautionary statement. Except to the extent required by applicable laws and regulations, we undertake no obligation to update these forward-looking statements to reflect events or circumstances after the date of this release or to reflect the occurrence of unforeseen events.

Two Harbors Investment Corp.

Two Harbors Investment Corp., a Maryland corporation, is a real estate investment trust that invests in residential mortgage-backed securities, mortgage servicing rights and other financial assets. Two Harbors is headquartered in St. Louis Park, Minnesota.

Further information

Two Harbors stockholders and other interested persons may find additional information about the Company on the Securities and Exchange Commission’s website at www.sec.gov or by directing inquiries to: Two Harbors Investment Corp., 1601 Utica Ave. S., Suite 900, St. Louis Park, MN, 55416, phone (612) 453-4100.

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