NEW YORK and SANTA MONICA, Calif., Dec. 7, 2020 /PRNewswire/ -- Ready Capital
Corporation (NYSE:RC) ("Ready Capital"), a multi-strategy real
estate finance company that originates, acquires, finances and
services small- to medium-sized balance commercial loans, and
Anworth Mortgage Asset Corporation (NYSE:ANH) ("Anworth"), a
specialty finance REIT that focuses primarily on investments in
residential mortgage-backed securities, announced today that they
have entered into a definitive merger agreement pursuant to which
Ready Capital will combine with Anworth. The combined company is
expected to have a pro forma equity capital base in excess of
$1 billion. The combination is
expected to enhance shareholder liquidity and provide for increased
operating leverage across the larger equity base.
Under the terms of the merger agreement, each share of Anworth
common stock will be converted into 0.1688 shares of Ready Capital
common stock and $0.61 of cash
consideration. Based on Ready Capital's closing stock price on
Friday, December 4, 2020, the implied
offer price is $2.94 per share. Upon
the closing of the merger, Ready Capital stockholders are expected
to own approximately 76% of the combined company's stock, while
Anworth stockholders are expected to own approximately 24% of the
combined company's stock. Ready Capital will also assume Anworth's
three outstanding series of preferred stock.
In connection with the merger, Waterfall Asset Management, LLC
("Waterfall"), Ready Capital's external manager, has agreed to
reduce the base management fee it charges Ready Capital by an
aggregate of $4 million over the four
quarters immediately following the closing of the transaction.
Based on the closing prices of Ready Capital's common stock on
December 4, 2020, the market
capitalization of the combined company would be approximately
$984 million. The combined company
will operate under the name Ready Capital and its shares are
expected to continue trading on the New York Stock Exchange under
the existing ticker symbol "RC".
"This merger highlights our continued focus on establishing
Ready Capital as an industry-leading mortgage REIT, with the scale
and financial resources to pursue compelling risk-adjusted returns
across its diversified investment platform," stated Ready Capital
Chairman and Chief Executive Officer Thomas
Capasse. "The combined company will be in a more formidable
position to execute its business plan, improve operating and cost
efficiencies, and continue growth in a prudent and profitable
manner."
Anticipated Benefits to Ready Capital and Anworth
Stockholders from the Merger
- Over $1 billion combined capital
base and a diversified investment portfolio
- Portfolio redeployment will enable Ready Capital to capitalize
on attractive investment opportunities
- Scale advantages include:
-
- Reduced operating expenses (as a percentage of combined capital
base)
- Improved access to financing, including corporate debt funding
alternatives
- Greater portfolio diversification
- Enhanced shareholder liquidity and investor base diversity
Management, Governance and Corporate Headquarters
Upon completion of the merger, Ready Capital's Chairman and
Chief Executive Officer Thomas
Capasse will lead the company and Ready Capital executives
Jack Ross, Thomas Buttacavoli, Andrew Ahlborn and Gary
Taylor will remain in their current roles. The combined
company will be headquartered in New
York, New York. The Board of the combined company is
expected to have eight directors, consisting of Ready Capital's
existing seven directors and one independent director from
Anworth's current Board.
Timing and Approvals
The transaction has been unanimously approved by each of the
Boards of Directors of Ready Capital and Anworth. The transaction
is expected to close by the end of the first quarter of 2021,
subject to the respective approvals by the stockholders of Anworth
and Ready Capital and other customary closing conditions.
Advisors
Wells Fargo Securities is acting as exclusive financial advisor
and Alston & Bird LLP is acting as legal advisor to Ready
Capital. Credit Suisse is acting as exclusive financial
advisor and Greenberg Traurig LLP is acting as legal advisor to the
Board of Directors of Anworth.
Additional Information about the Merger
In connection with the proposed merger, Ready Capital expects to
file with the Securities and Exchange Commission (the "SEC") a
registration statement on Form S-4, containing a joint proxy
statement/prospectus, and other documents with respect to the
proposed merger. The joint proxy/prospectus will contain important
information about the proposed transaction and related
matters. STOCKHOLDERS OF READY CAPITAL AND ANWORTH ARE URGED
TO READ THE REGISTRATION STATEMENT AND THE JOINT PROXY
STATEMENT/PROSPECTUS (INCLUDING ALL AMENDMENTS AND SUPPLEMENTS
THERETO) AND OTHER RELEVANT DOCUMENTS FILED BY READY CAPITAL AND
ANWORTH WITH THE SEC CAREFULLY IF AND WHEN THEY BECOME AVAILABLE
BECAUSE THEY WILL CONTAIN IMPORTANT INFORMATION ABOUT READY
CAPITAL, ANWORTH AND THE PROPOSED MERGER.
Stockholders of Ready Capital and Anworth may obtain free copies
of the registration statement, the joint proxy statement/prospectus
and other relevant documents filed by Ready Capital or Anworth with
the SEC (if and when they become available) through the website
maintained by the SEC at www.sec.gov. Copies of the documents filed
by Ready Capital with the SEC are also available free of charge on
Ready Capital's website at www.readycapital.com. Copies of the
documents filed by Anworth with the SEC are also available free of
charge on Anworth's website at www.anworth.com.
This communication shall not constitute an offer to sell or the solicitation of an offer to buy any securities, nor shall there
be any sale of securities in any jurisdiction in which such offer,
solicitation or sale would be unlawful prior to registration
or qualification under the securities laws of any such jurisdiction.
No offering of securities shall be made except by means
of a prospectus meeting the requirements of Section 10 of the U.S.
Securities Act of 1933, as amended.
Participants in Solicitation Relating to the Merger
Ready Capital, Anworth and their respective directors and
executive officers, and certain other affiliates of Ready Capital
and Anworth may be deemed to be participants in the solicitation of
proxies from the stockholders of Ready Capital and Anworth in
respect of the proposed merger. Information regarding Ready
Capital's directors and executive officers can be found in Ready
Capital's definitive proxy statement filed with the SEC on
May 14, 2020 and Ready Capital's most
recent Annual Report filed on Form 10-K for the fiscal year ended
December 31, 2019. Information
regarding Anworth's directors and executive officers can be found
in Anworth's definitive proxy statement filed with the SEC on
March 16, 2020 and Anworth's most
recent Annual Report filed on Form 10-K for the fiscal year ended
December 31, 2019. Additional
information regarding the interests of such potential participants
will be included in the joint proxy statement/prospectus and other
relevant documents filed with the SEC in connection with the
proposed merger if and when they become available. These
documents are available free of charge on the SEC's website and
from Ready Capital or Anworth, as applicable, using the sources
indicated above.
Forward-Looking Statements
This press release contains statements that constitute
"forward-looking statements," as such term is defined in Section
27A of the Securities Act and Section 21E of the Exchange Act and
such statements are intended to be covered by the safe harbor
provided by the same. These statements are based on current
expectations and beliefs of Ready Capital and Anworth and are
subject to a number of trends and uncertainties that could cause
actual results to differ materially from those described in the
forward-looking statements; neither Ready Capital nor Anworth can
give any assurance that its expectations will be attained.
Factors that could cause actual results to differ materially
from expectations include, but are not limited to, the risk that
the merger will not be consummated within the expected time period
or at all; the occurrence of any event, change or other
circumstances that could give rise to the termination of the merger
agreement; the inability to obtain stockholder approvals relating
to the merger and issuance of shares in connection therewith or the
failure to satisfy the other conditions to completion of the
merger; risks related to disruption of management attention from
the ongoing business operations due to the proposed merger; the
effect of the announcement of the proposed merger on Ready
Capital's and Anworth's operating results and businesses generally;
the outcome of any legal proceedings relating to the merger; the
ability to retain key personnel; availability of suitable
investment opportunities; changes in interest rates; changes in the
yield curve; changes in prepayment rates; the availability and
terms of financing; general economic conditions; market conditions;
conditions in the market for small balance commercial loans and
other investments; legislative and regulatory changes that could
adversely affect the businesses of Ready Capital and Anworth; and
other factors, including those set forth in the Risk Factors
section of Ready Capital's and Anworth's most recent Annual Reports
on Form 10- K and other reports filed by Ready Capital and Anworth
with the SEC, copies of which are available on the SEC's website,
www.sec.gov. Neither Ready Capital nor Anworth undertakes any
obligation to update these statements for revisions or changes
after the date of this press release, except as required by
law.
About Anworth Mortgage Asset Corporation
Anworth Mortgage Asset Corporation (NYSE: ANH), a Maryland corporation, is a specialty finance
mortgage company organized to qualify as a real estate investment
trust ("REIT") that invests primarily in mortgage-backed securities
that are either rated "investment grade" or are guaranteed by
federally sponsored enterprises, such as Fannie Mae or Freddie
Mac. Anworth seeks to generate income for distribution
primarily based on the difference between the yield on their
mortgage assets and the cost of their borrowings. Anworth Mortgage
Asset Corporation is headquartered in Santa Monica, California, and is externally
managed and advised by Anworth Management LLC.
About Ready Capital Corporation
Ready Capital Corporation (NYSE: RC) is a multi-strategy real
estate finance company that originates, acquires, finances and
services small- to medium-sized balance commercial loans.
Ready Capital specializes in loans backed by commercial real
estate, including agency multifamily, investor and bridge as well
as SBA 7(a) business loans. Headquartered in New York, New York, Ready Capital employs over
400 lending professionals nationwide. The company is
externally managed and advised by Waterfall Asset Management,
LLC.
Contact
Ready Capital
Investor Relations
Ready Capital Corporation
212-257-4666
InvestorRelations@readycapital.com
Anworth
Investor Relations
Anworth Mortgage Asset Corporation
Attn: John T. Hillman
(310) 255-4438
jhillman@anworth.com
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SOURCE Ready Capital Corporation