South Portland-based Residential Mortgage Services to be acquired in $200M deal
A San Diego company announced Tuesday it plans to acquire South Portland-based Residential Mortgage Services Inc. for nearly $200 million.
Guild Holdings Co. (NYSE: GHLD), a mortgage lender and servicer with operations in 31 states, has inked an agreement to purchase RMS and expects the deal to close during the third quarter of this year, according to a news release.
RMS is a retail mortgage company with over 850 employees and 70 offices in 14 northeastern states. Besides its South Portland base, the firm has Maine locations in Auburn, Augusta, Bangor, Brunswick, Falmouth and Kennebunk.
Upon completion of the deal, the RMS management team, including President and CEO Jim Seely, would continue to run the business, Guild said in the release.
Based on 2020 mortgage originations, the combined company would have been the seventh-largest nonbank retail lender in the country, according to Guild.
In 2020, RMS originated $8.5 billion in loans, up from $5 billion in 2019 and $3.9 billion the previous year.
Guild provided almost $28 billion in mortgages during the 12 months ended June 30, 2020, according to its annual report. On Tuesday, the company also reported financial results for the quarter ended March 31, 2021, showing mortgage originations of $9.8 billion during that three-month period, a 70% year-over-year increase.
If approved by regulators, the RMS deal would be the seventh acquisition for Guild since 2008. The acquisition would broaden the company’s footprint in the Northeast, while bringing new technology and servicing capabilities to RMS, according to the release.
Seely said, “We are excited to join forces with Guild Mortgage to drive continued growth for our respective stakeholders. Guild and RMS share a similar entrepreneurial culture — one that places a high value on market expertise, efficiency and productivity. This transaction is a natural next step to build on our success.”
Guild CEO Mary Ann McGarry added, “With both teams dedicated to providing exceptional customer service, and the many synergies between our products, sales tools, and servicing teams, this is a natural fit. We expect the combination will result in an even stronger platform that will continue to deliver profitable sustained growth, as we create long-term value for all our stakeholders.”
Under terms of the agreement, Guild estimated the purchase price to be $196.7 million but said that figure would be finalized based on a June 1 valuation of RMS.
By late Tuesday morning, shares of Guild were trading at $14.76, after closing Monday at $14.20. The company has a market capitalization of $852 million.
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