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CrossCountry Mortgage closes Two Harbors deal to add MSR servicing

The transaction values Two Harbors at about $1.26 billion and brings an approximately $155 billion owned mortgage servicing portfolio to CrossCountry’s $209 billion MSR book.

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HousingWire reports that CrossCountry Mortgage has completed its acquisition of Two Harbors Investment Corp., paying $12 per share in cash plus a stub dividend of $0.20326 per share for stockholders of record as of Monday. The deal takes Two Harbors private, with its common stock set to stop trading on the New York Stock Exchange.

According to HousingWire, the transaction adds roughly a $155 billion owned MSR portfolio and the RoundPoint servicing platform to CrossCountry’s existing $209 billion MSR book. CrossCountry Merger Corp., a CCM affiliate, merged into Two Harbors, with Two Harbors surviving as a wholly owned subsidiary of CCM.

HousingWire also reports that the merger consideration is based on about 105.13 million common shares outstanding, implying total merger value of about $1.26 billion and a total cash outlay of about $1.28 billion after the stub dividend. CrossCountry also agreed to pay a roughly $25.4 million termination fee tied to Two Harbors earlier termination of its deal with United Wholesale Mortgage.

The outlet further notes that, per an SEC 8-K filing tied to the closing, all members of Two Harbors’ pre-merger board stepped down at the effective time of the merger. The filing says the departures were made in connection with consummating the transaction, and Ron Leonhardt became a director of Two Harbors by operation of the merger.

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