Mark Bouris’ wealth management company Yellow Brick Road is buying RESI Mortgage Corporation for $36 million.
Yellow Brick Road entered into a trading halt on Monday before today announcing its conditional agreement to acquire the privately owned, non-bank mortgage business.
The deal includes $28 million payable in cash on settlement, and the issue of $5.5 million in ordinary YBR shares at an agreed price of $0.70 each. If a number of earn-out conditions are met the remaining $2.5 million will be paid in 12 months of settlement.
To pay the cash component of the RESI deal, YBR is raising $42.05 million in capital via private placements, issuing over 60 million shares to a mix of existing shareholders and institutional investors. The funds will also be used to pay for the company’s Vow Financial acquisition as well as general working capital. The placement is expected to be completed at the end of August.
Bouris, YBR’s executive chairman who has just agreed to stay in the role until July 2019, said the acquisition “is another important milestone in our strategy to become a leader in the non-bank segment”.
He expects the purchase will help YBR scale its mortgage business.
YBR shares were trading up 4.11% a short time ago at $0.76.