UWM Holdings Corporation (UWMC) has entered into a definitive merger agreement to acquire Two Harbors Investment Corp. (TWO) in an all-stock transaction for $1.3 billion in equity value.
The acquisition aims to strengthen UWMC's long-term vision by expanding its servicing portfolio and capabilities, leading to increased profitability and cash flow.
This strategic move is expected to create significant synergies and enhance outcomes for UWM, brokers, consumers, and stockholders.
Expanded Servicing Expertise
The acquisition provides UWMC with expanded servicing expertise and scale, doubling its existing MSR portfolio to approximately $400 billion.
Cost and Revenue Synergies
Anticipated annual cost and revenue synergies of approximately $150 million are expected to drive meaningful earnings accretion for UWMC.
Pro Forma Cash Flow Strength
UWMC's strong pro forma cash flow, coupled with a strengthened balance sheet, will support continued investment in growth and dividend rewards for stockholders.
- The combined company will service over $400 billion in MSR, ranking number 8 among servicers nationwide.
- UWMC's industry-leading originations business, combined with TWO's servicing expertise, positions the company as a world-class complete mortgage company.
- Further efficiencies in financing, hedging, and secondary markets are expected from TWO's capital markets expertise and UWMC's scale.
The acquisition of Two Harbors Investment Corp. marks a strategic milestone for UWM Holdings Corporation, solidifying its position in the mortgage industry and paving the way for enhanced growth opportunities and synergies.