Altisource Executes Non-Binding Letters of Intent With Ocwen Financial
Corporation to Purchase Certain Fee-Based Businesses of Homeward Residential
and Residential Capital
LUXEMBOURG, Feb. 12, 2013 (GLOBE NEWSWIRE) -- Altisource Portfolio Solutions
S.A., on behalf of itself and its subsidiaries, ("Altisource") (Nasdaq:ASPS)
entered into non-binding letters of intent with Ocwen Financial Corporation,
on behalf of itself and its subsidiaries, ("Ocwen") (NYSE:OCN) to acquire
certain fee-based businesses related to Ocwen's recently acquired Homeward
Residential Holdings, Inc. mortgage servicing and origination business
platform (the "Homeward Residential Fee-Based Businesses") and Ocwen's
anticipated purchase of the mortgage servicing platform from Residential
Capital, LLC (the "ResCap Fee-Based Businesses") for a combined purchase price
of $218.6 million.
William B. Shepro, Chief Executive Officer of Altisource said, "These fee
based business acquisitions are strategically valuable to Altisource, helping
us maintain our business model with Ocwen, expanding our footprint and
providing significant revenue and earnings growth to Altisource. We believe
the combined purchase price will provide a projected unlevered pre-tax return
to Altisource of approximately 20%."
Ronald M. Faris, Chief Executive Officer of Ocwen said, "By selling these
non-core assets, Ocwen is able to achieve a greater projected return on the
Homeward and ResCap servicing acquisitions and to continue to focus primarily
on growing our core residential and commercial servicing businesses. Having an
outlet for disposition of peripheral mortgage-related assets significantly
enhances Ocwen's competitive positioning for future servicing platform
acquisitions that include non-core operations."
The letter of intent for the Homeward Residential Fee-Based Businesses
contemplates that Altisource will acquire from Ocwen (i) all of the capital
stock of Beltline Road Insurance Agency, Inc., Power Default Services, Inc.,
Power REO Management Services, Inc. and Power Valuation Services, Inc., (ii)
the Mortgage Asset Recovery Special Services Division of Stratus Asset
Management Group, LLC, and (iii) certain designated intellectual property and
information technology assets related to Homeward Residential Holdings, Inc.
The letter of intent for the ResCap Fee-Based Businesses contemplates that
Altisource will acquire from Ocwen certain fee-based businesses related to
default management and charge-off services, designated intellectual property
and information technology assets related to Ocwen's anticipated purchase of
Residential Capital LLC's mortgage servicing platform.
In connection with the proposed transactions, Altisource and Ocwen will
execute a five-year extension until 2025 of certain existing services
agreements. Additionally, Ocwen will not develop similar fee-based services
that would directly or indirectly compete with the services provided by
Altisource to the Homeward Residential Holdings, Inc. and Residential Capital,
LLC servicing portfolios. The proposed purchase price is subject to working
capital and other adjustments, and consummation of the transactions is subject
to a number of contingencies that are customary for a transaction of this
nature, including various third party and regulatory consents and approvals.
The purchase of the ResCap Fee-Based Businesses is also subject to Ocwen's
closing of the underlying acquisition of the mortgage servicing platform from
Residential Capital LLC, which is expected later in February 2013.
This press release contains forward-looking statements that involve a number
of risks and uncertainties. Those forward-looking statements include all
statements that are not historical fact, including statements about
management's beliefs and expectations and the expected impact of the proposed
acquisitions. Forward-looking statements are based on management's beliefs as
well as assumptions made by and information currently available to management.
Because such statements are based on expectations as to future performance and
are not statements of historical fact, actual results may differ materially
from those projected. Neither Altisource nor Ocwen undertakes any obligation
to update any forward-looking statements whether as a result of new
information, future events or otherwise. The risks and uncertainties to which
forward-looking statements are subject include, but are not limited to: the
ability of the parties to successfully negotiate definitive agreements; the
possibility that the terms of definitive agreements may differ materially from
the terms currently contemplated, the ability of the parties to meet required
closing conditions under the definitive agreements; risks inherent in
integrating acquired businesses; the ability of Ocwen to meet its covenants
under the definitive agreements; the possibility that that the operating
performance of the businesses to be acquired may perform at a lower level than
expected, the impact of general economic and market conditions; governmental
regulations, taxes and policies; the availability of adequate and timely
sources of liquidity; and other risks and uncertainties detailed in the
"Forward-Looking Statements," "Risk Factors" and other sections of the Form
10-K and other filings of Altisource and Ocwen with the Securities and
Altisource Portfolio Solutions S.A. (Nasdaq:ASPS) is a global provider of
services focused on high-value, technology-enabled knowledge-based solutions
principally related to real estate and mortgage portfolio management, asset
recovery and customer relationship management. Additional information is
available at www.Altisource.com.
Ocwen Financial Corporation is a financial services holding company which,
through its subsidiaries, is engaged in the servicing and origination of
mortgage loans. Ocwen is headquartered in Atlanta, Georgia, and has additional
offices and operations in Florida, New Jersey, Texas, Washington, DC, the
United States Virgin Islands, India and Uruguay. Utilizing proprietary
technology, global infrastructure and world-class training and processes, we
provide solutions that help homeowners and make our clients' loans worth more.
Additional information is available at www.Ocwen.com.
CONTACT: Michelle Esterman
Chief Financial Officer
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