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MITT to buy Cherry Hill in cash-and-stock deal
The merger values Cherry Hill at about $117.5 million and carries a 29% premium, with 30% of consideration paid in cash.
TPG Mortgage Investment Trust (MITT) agreed to acquire Cherry Hill Mortgage Investment Corp. (CHMI) in a definitive cash-and-stock merger valued at about $117.5 million, creating a residential mortgage REIT platform with an approximately $9 billion investment portfolio, HousingWire reports. Under the terms, Cherry Hill stockholders will receive 0.3063 shares of MITT common stock and $0.93 in cash for each CHMI share. Based on MITT’s Friday closing price, the offer equals $3.10 per Cherry Hill share, a 29% premium. MITT said the combined company is expected to generate $7 million to $9 million in annual operating efficiencies, targeting a more favorable expense ratio and other cost savings. It also projected pro forma ownership of about 73% for MITT stockholders and about 27% for Cherry Hill stockholders, with about 30% of merger consideration paid in cash. The companies said Cherry Hill will designate two independent directors to join MITT’s board, expanding it to eight members. The combined portfolio is expected to include about 72% nonagency residential credit, 14.4% agency residential mortgage-backed securities and mortgage servicing rights, 12.6% home equity, and 1% other investments, and MITT will continue using resources from its manager, AG REIT Management LLC, an affiliate of TPG Inc., which reported $327 billion in assets under management.