Rithm Capital, listed on the NYSE, has acquired the troublesome US mortgage services business, which only returned to profit in the June half.
Computershare, the provider of share registry and employee share plan services, is selling its troublesome mortgage services business in the US to asset manager Rithm Capital for $US720 million .
Computershare said on Tuesday the sale of CLS to Rithm would result in a one-off, statutory pre-tax loss on the sale of between $US150 million to $US180 million. The impairment will not affect its underlying cash flow.Computershare gained 0.7 per cent in early trade to $26. Shares have risen by about 27 per cent since late March when it was trading at $20.52.Computershare CEO Stuart Irving said Rithm had the capital to be able to expand the business, and it should be a smooth transition.
Mr Irving said the sale was part of a simplification strategy where Computershare would put more investment into its core businesses of managing share registries, employee share plans and corporate trusts. “The divestment of [CLS] allows us to focus our efforts on our core businesses which have high levels of recurring revenues, long-term growth runways, low capital intensity and attractive returns through the cycle,” he said.
Rithm has $US34 billion in assets under management across the real estate and financial services sectors. Rithm said the acquisition includes $US136 billion in unpaid principal balance of mortgage servicing rights, of which $US85 billion is third-party servicing. Once settled, a Rithm company called Newrez will oversee the mortgage servicing business.
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