JERSEY CITY, N.J., March 30 /PRNewswire-FirstCall/ -- Knight Capital
Group, Inc. (Nasdaq: NITE), today announced that it has agreed to
acquire Urban Financial Group, Inc., a privately-held, independent
mortgage company. An originator of direct and brokered residential
mortgage loans, Urban Financial is a major provider of home equity
conversion mortgages (HECM), or reverse mortgages, in the U.S.
Terms of the acquisition were not disclosed.
The acquisition will provide Knight's fixed income team with a
captive new issue pipeline of HECM mortgage-backed securities
(HMBS) for institutional clients. In addition, the integration of
Urban Financial will allow Knight to realize a greater percentage
of revenues from origination to distribution.
"Urban Financial is a growing company with a solid product
offering that originates loans nationwide through branch offices
and independent brokers," said Thomas M.
Joyce, Chairman and CEO, Knight Capital Group. "We're
excited by the potential to establish a steady new issue pipeline
that generates healthy revenues end-to-end. In particular, reverse
mortgages packaged as HMBS are popular among institutions because
of the attractive rates relative to the risks involved."
Founded by Chief Executive Officer Bryan
W. Hendershot in 2003, Urban Financial is a privately-held,
independent mortgage company. The company is an originator of
direct and brokered residential mortgage loans, including
FHA-insured mortgages. Based in Tulsa,
Okla., Urban Financial has 115 employees and branch offices
in more than one dozen states. The company currently offers or
purchases residential mortgage loans in more than two dozen
states.
"We're extremely pleased to join Knight as the enhanced capital
will allow Urban Financial to increase origination activities and
expand the product offering. We look forward to working with
Knight's fixed income team to build HMBS issuance," Mr. Hendershot
said.
Knight's fixed income team provides institutional clients with
research, sales and trading across a broad range of securities that
include high yield/distressed, investment grade/crossover, bank
loans, hybrid securities, ABS/MBS, convertible bonds, municipals,
taxable municipals and corporate/sovereign emerging markets debt.
In addition, Knight offers capital markets services covering equity
and debt securities.
The closing of the acquisition is subject to customary closing
conditions and regulatory approvals. The acquisition is expected to
be cash flow positive immediately following the close and accretive
to earnings per share in 2010. Upon the close, Urban Financial will
operate as a wholly-owned indirect operating subsidiary of Knight
Capital Group, Inc. Urban Financial is an Equal Housing Lender and
a member of the National Reverse Mortgage Lenders Association.
The advisors to Knight on the transaction are Kirkland &
Ellis LLP and Weiner Brodsky Sidman Kider
PC. The advisors to Urban Financial are Pinkerton &
Finn, P.C. and Sonnenschein Nath & Rosenthal LLP.
About Knight
Knight Capital Group, Inc. (Nasdaq: NITE) is global financial
services firm that provides market access and trade execution
services across multiple asset classes to buy- and sell-side firms.
Knight's hybrid market model features complementary electronic and
voice trade execution services in global equities and fixed income
as well as foreign exchange, futures and options. The firm is the
leading source of liquidity in U.S. equities by share volume.
Knight also offers capital markets services to corporate issuers.
Knight is headquartered in Jersey City,
NJ with a growing global presence across North America, Europe and the Asia-Pacific region. For more information,
please go to www.knight.com.
Certain statements contained herein may constitute
"forward-looking statements" within the meaning of the Private
Securities Litigation Reform Act of 1995. These forward-looking
statements are not historical facts and are based on current
expectations, estimates and projections about the Company's
industry, management's beliefs and certain assumptions made by
management, many of which, by their nature, are inherently
uncertain and beyond our control. Accordingly, readers are
cautioned that any such forward-looking statements are not
guarantees of future performance and are subject to certain risks,
uncertainties and assumptions that are difficult to predict
including, without limitation, risks associated with changes in
market structure, legislative or regulatory rule changes, the
costs, integration, performance and operation of businesses
recently acquired or developed organically, or that may be acquired
in the future, by the Company and risks related to the costs and
expenses associated with the Company's exit from the Asset
Management business. Since such statements involve risks and
uncertainties, the actual results and performance of the Company
may turn out to be materially different from the results expressed
or implied by such forward-looking statements. Given these
uncertainties, readers are cautioned not to place undue reliance on
such forward-looking statements. Unless otherwise required by law,
the Company also disclaims any obligation to update its view of any
such risks or uncertainties or to announce publicly the result of
any revisions to the forward-looking statements made in this
report. Readers should carefully review the risks and uncertainties
disclosed in the Company's reports with the U.S. Securities and
Exchange Commission (SEC), including, without limitation, those
detailed under the headings "Certain Factors Affecting Results of
Operations" and "Risk Factors" in the Company's Annual Report on
Form 10-K for the year-ended December 31,
2009, and in other reports or documents the Company files
with, or furnishes to, the SEC from time to time. This information
should also be read in conjunction with the Company's Consolidated
Financial Statements and the Notes thereto contained in the
Company's Annual Report on Form 10-K for the year-ended
December 31, 2009, and in other
reports or documents the Company files with, or furnishes to, the
SEC from time to time.
SOURCE Knight Capital Group, Inc.