Radian Sells $258.5 Million of Shares to for Clayton Deal

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.

Radian sold 17.8 million shares for $14.50 apiece, the Philadelphia-based company said. The stock gained 5.6 percent to $14.83 in New York trading before yesterday’s announcement.

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.