Plano-based finance and solutions platform acquires reverse mortgage lender assets from California.
Finance of America Companies acquires American Advisors Group, a consumer-facing reverse mortgage lender. Under the terms of the deal, subsidiary Finance of America Reverse LLC will operate a separate direct-to-consumer company under the American Advisors Group brand name, according to the Dallas Business Journal.
Finance of America said in an SEC filing released Wednesday that it has entered into a stock purchase agreement for the acquisition. American Advisors Group founder Reza Jahangiri has pledged to sell more than 10 million shares for his $15 million. Under the terms of the deal, Jahangiri will receive approximately $10 million in cash and the remainder in certain Finance of America shares.
Under the terms of the transaction, Finance of America shareholders, including Chairman Brian Libman, will invest an additional $30 million in capital in the company through a private placement of FOA’s common stock. Subject to customary closing conditions and regulatory approvals, the transaction is expected to close in his first half of 2023.
According to the Dallas Morning News, the closing of the transaction is expected to help grow “both FOA’s tangible book value and earnings per share.”
FOA CEO Graham A. Fleming said in a media release announcing the acquisition: We believe that this expansion into direct-to-consumer channels will enable us to further educate, grow and serve this market, while increasing value and opportunity for our customers, employees, partners and investors. ”
— Maddie Sperling