Australia’s Computershare to Sell US Mortgage Portfolio for $720 Million, According to Reuters

By Rishav Chatterjee

Australia’s Computershare announced on Tuesday that it is selling its U.S. mortgage services division to asset manager Rithm Capital for $720 million. This strategic move is part of Computershare’s effort to refocus on its core businesses.

The transaction includes the sale of Specialised Loan Servicing (SLS), a U.S. mortgage subservicer, which will bring a mortgage servicing rights portfolio valued at approximately $136 billion in unpaid principal balance to Rithm. Following the completion of the transaction, SLS’ portfolio and operations will be managed by Newrez, another company within the Rithm portfolio.

Shares of Computershare experienced a boost, rising by as much as 3.3% to A$26.66, reaching their highest point since December 22. Computershare originally entered the loan-servicing sector with its acquisition of SLS in the U.S. in 2011.

The divestiture allows Computershare to hone in on its primary operations, which are characterized by stable recurring revenues, long-term growth potential, low capital requirements, and attractive returns, according to CEO and President Stuart Irving.

The company expects that this move will enhance its earnings per share within the first year post-divestiture, which is anticipated to be finalized in the fourth quarter of fiscal 2024.

Rithm, specializing in real estate and financial services, intends to finance the acquisition using a mix of available cash, liquidity, and additional mortgage servicing rights financing.

Market analyst Henry Jennings remarked that the transaction seems beneficial for Computershare, enabling the company to regain focus. He added that given the competitive nature of mortgage markets, this divestment is a pragmatic decision for Computershare.

Baron Silverstein, president of Newrez, stated that acquiring SLS will expand their special servicing capabilities and increase their client base on the Newrez platform.

Computershare anticipates incurring a one-time statutory pre-tax loss valued between $150 million and $180 million as a result of this divestment.