May 8 (Bloomberg) -- Radian Group Inc., the largest U.S. mortgage insurer, raised $258.5 million by selling shares below yesterday’s closing price to help pay for the acquisition of Clayton Holdings.
The mortgage insurer announced this week that it had agreed to buy Clayton for $305 million to expand outsourcing services for the home-lending industry. Radian also sold $300 million in debt as part of the deal.
“The acquisition provides a good opportunity for Radian to expand its franchise beyond its core mortgage-insurance business, while remaining within its field of expertise,” Moody’s Investors Service said in a note.
Goldman Sachs Group Inc. managed the stock sale with JPMorgan Chase & Co., Morgan Stanley, Keefe, Bruyette & Woods Inc. and Macquarie Group Ltd. Underwriters exercised their option to purchase an additional 2.33 million shares after Radian’s offering of 15.5 million shares.
The $305 million purchase price includes the repayment of Clayton’s outstanding debt, according to the statement from Radian. Clayton had net income of $9.1 million last year on revenue of $135 million, Radian said.
Radian slipped 0.7 percent to $14.72 today in New York. It has advanced 4.3 percent this year, compared with the 5.7 percent decline for the Russell 2000 Index. (RTY)
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