– Differentiated End-to-End Cycle Resistant
Platform in Consumer and Business Lending –
– Secular Mortgage Industry Tailwinds and
Multiple Avenues for Growth –
– Funds Managed by Blackstone Tactical
Opportunities and FOA’s Management/Founder Will Retain
Approximately 70% Equity Ownership Post-Closing -
- Strong top line growth and superior operating leverage, with a
41% revenue CAGR from 2018 to 2020E, a 188% GAAP pre-tax income
CAGR, and a 182% CAGR for Adjusted EBITDA
- Brian Libman, Founder and Chairman of Finance of America,
Patricia Cook, Chief Executive Officer, and Graham Fleming,
President, will continue to lead the company
- Implied equity value of the combined company at closing is
approximately $1.9 billion
- Top-tier institutional investors have committed to a $250
million PIPE at price per share of $10.00
- Management, founder and Blackstone to remain closely aligned
with shareholders at transaction close
- Transaction is expected to close in the first half of 2021
- Investor call scheduled for October 13, 2020
Finance of America Equity Capital LLC (“Finance of America”
or the “Company”), an end-to-end lending and services platform,
and Replay Acquisition Corp. (NYSE: RPLA) (“Replay Acquisition”), a
publicly traded special purpose acquisition company, agreed to a
business combination that will result in Finance of America
becoming a publicly listed company.
Finance of America seamlessly connects borrowers with investors.
The Company operates in four large and growing markets including
Mortgage, Reverse Mortgage, Commercial Real Estate, and Fixed
Income Investing, with each supported by powerful structural
tailwinds such as low interest rates, underserved markets,
fragmented competition, constructive demographic trends, and
favorable supply and demand imbalances, which lower volatility and
create stable, growing earnings.
Finance of America’s multiproduct line-up is broadly distributed
through retail locations, loan officers, and a third-party
origination network and powered by a differentiated end-to-end
digital platform, providing jobs to over 5,000 employees globally.
Beyond product offerings, the Company offers ancillary services to
its partners and to enhance the customer experience, resulting in
incremental fee income. Furthermore, the Company’s capital markets
and portfolio management capabilities inform product innovation,
optimize execution, and allow for selective retention of assets
while delivering superior risk-adjusted returns to investors.
“We have built an integrated lending platform which seamlessly
connects borrowers with investors. Our platform is product
agnostic, with the ability to shift our focus and resources as the
opportunity set changes. We have also driven product innovation
across sectors complemented by successful acquisitions to broaden
product capabilities, distribution reach, and customer sets
resulting in growing, cycle-resistant earnings,” said Brian Libman,
Chairman and Founder of Finance of America. “We look to further
expand our capabilities to serve the full range of borrower needs
and achieve investor goals while continuing to produce sustainable
earnings growth.”
“Finance of America is a unique, highly differentiated platform
offering a broad suite of products across a multi-channel
distribution network. The Company remains well positioned to
continue to generate growth by capitalizing on secular macro trends
and mobilizing resources to take advantage of market
opportunities,” said Edmond Safra, Co-CEO of Replay Acquisition.
Mr. Safra’s partners on the transaction include Lance West, former
Senior Managing Director of Centerbridge Partners and former
Chairman & CEO of Centerbridge Partners Europe.
The guiding principle of “Customers First, Last and Always” has
helped drive Finance of America’s success. Initiatives include the
Finance of America Foundation in partnership with former
Congressman Barney Frank providing support, education and relief to
distressed borrowers, and Finance of America Cares, a nonprofit
organization created in partnership with employees to serve local
community needs.
“Becoming a public company is an important milestone for Finance
of America and provides further access to capital via the public
markets over time,” added Patricia Cook, Chief Executive Officer of
Finance of America. “We look forward to accelerating our growth
across cycles as we increasingly leverage our complementary
portfolio of businesses, differentiated technology capabilities,
and a capital-light model with fully integrated capabilities.”
Menes Chee, Senior Managing Director at Blackstone, said:
“Blackstone is proud to have supported the Company’s significant
growth since its founding — becoming a leader and innovator in the
market. Moving forward as a public company, we believe Finance of
America is poised for continued success together with its new
investment partners and exceptional management team.”
Key Transaction Terms
The transaction implies an equity valuation at closing for the
combined company of $1.9 billion. Top-tier institutional investors
have committed to invest $250 million in the form of a PIPE at a
price of $10.00 per share of the combined company’s Class A common
stock immediately prior to the closing of the transaction.
Estimated cash proceeds will consist of the PIPE in addition to
Replay Acquisition’s $288 million of cash in trust, subject to
redemptions.
It is anticipated that the combined company will begin with a
minimum of $250 million of cash and cash equivalents.
Pro forma for the transaction, assuming no redemptions by Replay
Acquisition’s public shareholders, Management, entities managed by
Finance of America’s founder and funds managed by Blackstone
Tactical Opportunities will own approximately 70% of the combined
company. Over half of the sponsor’s founder shares of Replay
Acquisition will be deferred and subject to share price
hurdles.
The Board of Directors of Replay Acquisition and the Board of
Finance of America’s parent company have unanimously approved the
transaction. The transaction will require the approval of the
shareholders of Replay Acquisition, and is subject to other
customary closing conditions, including the receipt of certain
regulatory approvals. The transaction is expected to close in the
first half of 2021.
Advisors
Simpson Thacher & Bartlett LLP is acting as legal advisor to
Finance of America.
Credit Suisse Securities (USA) LLC is acting as capital markets
advisor to Replay Acquisition. Morgan Stanley & Co. LLC and
Goldman Sachs & Co. LLC served as lead placement agents and
Credit Suisse Securities (USA) LLC served as placement agent for
the PIPE. Greenberg Traurig, LLP is acting as legal advisor to
Replay Acquisition.
Investor Conference Call/Webcast Information
Finance of America and Replay Acquisition will host a joint
investor conference call and webcast to discuss the proposed
transaction today, October 13, 2020 at 8:00 am ET.
To listen to the prepared remarks, please visit
https://www.retailroadshow.com/?link=financeofamerica or dial
1-844-385-9713 (U.S.) or 1-678-389-4980 (International). A
telephone replay will be available at 1-844-385-9713 (U.S.) or
1-678-389-4980 (International), replay pin number: 52917.
Replay Acquisition will file an investor presentation relating
to the proposed transaction with the U.S. Securities and Exchange
Commission (the “SEC”) as an exhibit to a Current Report on Form
8-K prior to the call, which will be available on the SEC’s website
at www.sec.gov.
About Finance of America
Finance of America is an end-to-end consumer lending and
services platform which seamlessly connects borrowers with
investors. Product offerings include mortgages, reverse mortgages,
and loans to residential real estate investors distributed across
retail, third party network, and digital channels. In addition,
Finance of America offers complementary lending services to our
business partners and to enhance the customer experience, as well
as capital markets and portfolio management capabilities to
optimize distribution to investors. The Company is headquartered in
Irving, TX, and has an industry leading list of strategic and
capital partners including funds managed by The Blackstone Group
Inc., the leading global asset manager.
www.financeofamerica.com
About Replay Acquisition Corp.
Founded by Edmond Safra, Gregorio Werthein and Gerardo Werthein,
Replay Acquisition Corp. is a NYSE-listed blank check company
incorporated as a Cayman Islands exempted company and formed for
the purpose of effecting a merger, amalgamation, share exchange,
asset acquisition, share purchase, reorganization or similar
business combination with one or more businesses on industries that
we believe have favorable prospects and a high likelihood of
generating strong risk-adjusted returns for our shareholders. These
industries include consumer, telecommunications and technology,
energy, infrastructure, financial services and real estate, among
others. www.replayacquisition.com
About Blackstone
Blackstone is one of the world’s leading investment firms. We
seek to create positive economic impact and long-term value for our
investors, the companies we invest in, and the communities in which
we work. We do this by using extraordinary people and flexible
capital to help companies solve problems. Our $564 billion in
assets under management include investment vehicles focused on
private equity, real estate, public debt and equity, life sciences,
growth equity, opportunistic, non-investment grade credit, real
assets and secondary funds, all on a global basis. Further
information is available at www.blackstone.com. Follow Blackstone
on Twitter @Blackstone.
About Blackstone Tactical Opportunities
Tactical Opportunities (Tac Opps) is Blackstone’s opportunistic
investment platform. The Tac Opps team invests globally across
asset classes, industries and geographies, seeking to identify and
execute on attractive, differentiated investment opportunities. As
part of the strategy, the team leverages the intellectual capital
across Blackstone’s various businesses while continuously
optimizing its approach in the face of ever-changing market
conditions.
Important Information About the Proposed Business Combination
and Where to Find It
In connection with the proposed business combination, a
registration statement on Form S-4 (the “Form S-4”) is expected to
be filed by a newly-formed holding company (“New Pubco”) with the
SEC that will include a proxy statement of Replay Acquisition that
will also constitute a prospectus of New Pubco. Replay
Acquisition’s shareholders and other interested persons are advised
to read, when available, the Form S-4, including the preliminary
proxy statement/prospectus and the amendments thereto and the
definitive proxy statement/prospectus and documents incorporated by
reference therein, as well as other documents filed with the SEC in
connection with the proposed business combination, as these
materials will contain important information about Finance of
America, Replay Acquisition and the proposed business combination.
Such persons can also read Replay Acquisition’s Annual Report on
Form 10-K for the fiscal year ended December 31, 2019, for a
description of the security holdings of Replay Acquisition’s
officers and directors and their respective interests as security
holders in the consummation of the proposed business combination.
When available, the definitive proxy statement/prospectus will be
mailed to shareholders of Replay Acquisition as of a record date to
be established for voting on the proposed business combination.
Shareholders will also be able to obtain copies of such documents,
without charge, once available, at the SEC’s website at
www.sec.gov, or by directing a request to: Replay Acquisition
Corp., 767 Fifth Avenue, 46th Floor, New York, New York 10153, or
info@replayacquisition.com.
Participants in the Solicitation
Replay Acquisition, Finance of America, New Pubco and their
respective directors, executive officers and other members of their
management and employees, under SEC rules, may be deemed to be
participants in the solicitation of proxies of Replay Acquisition’s
shareholders in connection with the proposed business combination.
Investors and security holders may obtain more detailed information
regarding the names, affiliations and interests of Replay
Acquisition’s directors and executive officers in Replay
Acquisition’s Annual Report on Form 10-K for the fiscal year ended
December 31, 2019, which was filed with the SEC on March 25, 2020.
Information regarding the persons who may, under SEC rules, be
deemed participants in the solicitation of proxies of Replay
Acquisition’s shareholders in connection with the proposed business
combination will be set forth in the proxy statement/prospectus for
the proposed business combination when available. Information
concerning the interests of Replay Acquisition’s and Finance of
America’s participants in the solicitation, which may, in some
cases, be different than those of Replay Acquisiton’s and Finance
of America’s equity holders generally, will be set forth in the
proxy statement/prospectus relating to the proposed business
combination when it becomes available.
Forward-Looking Statements
This press release includes “forward-looking statements” within
the meaning of the “safe harbor” provisions of the United States
Private Securities Litigation Reform Act of 1995. Replay
Acquisition’s and Finance of America’s actual results may differ
from their expectations, estimates, and projections and,
consequently, you should not rely on these forward-looking
statements as predictions of future events. Words such as “expect,”
“estimate,” “project,” “budget,” “forecast,” “anticipate,”
“intend,” “plan,” “may,” “will,” “could,” “should,” “believes,”
“predicts,” “potential,” “continue,” and similar expressions (or
the negative versions of such words or expressions) are intended to
identify such forward-looking statements. These forward-looking
statements include, without limitation, Replay Acquisition’s and
Finance of America’s expectations with respect to future
performance and anticipated financial impacts of the proposed
business combination, the satisfaction or waiver of the closing
conditions to the proposed business combination, and the timing of
the completion of the proposed business combination.
These forward-looking statements involve significant risks and
uncertainties that could cause the actual results to differ
materially, and potentially adversely, from those expressed or
implied in the forward-looking statements. Most of these factors
are outside Replay Acquisition’s and Finance of America’s control
and are difficult to predict. Factors that may cause such
differences include, but are not limited to: (1) the occurrence of
any event, change, or other circumstances that could give rise to
the termination of the definitive merger agreement (the
“Agreement”); (2) the outcome of any legal proceedings that may be
instituted against Replay Acquisition, New Pubco and/or Finance of
America following the announcement of the Agreement and the
transactions contemplated therein; (3) the inability to complete
the proposed business combination, including due to failure to
obtain approval of the shareholders of Replay Acquisition, certain
regulatory approvals, or satisfy other conditions to closing in the
Agreement; (4) the occurrence of any event, change, or other
circumstance that could give rise to the termination of the
Agreement or could otherwise cause the transaction to fail to
close; (5) the impact of COVID-19 on Finance of America’s business
and/or the ability of the parties to complete the proposed business
combination; (6) the inability to obtain or maintain the listing of
New Pubco’s shares of common stock on the NYSE following the
proposed business combination; (7) the risk that the proposed
business combination disrupts current plans and operations as a
result of the announcement and consummation of the proposed
business combination; (8) the ability to recognize the anticipated
benefits of the proposed business combination, which may be
affected by, among other things, competition, the ability of
Finance of America to grow and manage growth profitably, and retain
its key employees; (9) costs related to the proposed business
combination; (10) changes in applicable laws or regulations; and
(11) the possibility that Finance of America or Replay Acquisition
may be adversely affected by other economic, business, and/or
competitive factors. The foregoing list of factors is not
exclusive. Additional information concerning certain of these and
other risk factors is contained in Replay Acquisition’s most recent
filings with the SEC and will be contained in the Form S-4,
including the proxy statement/prospectus expected to be filed in
connection with the proposed business combination. All subsequent
written and oral forward-looking statements concerning Replay
Acquisition, Finance of America or New Pubco, the transactions
described herein or other matters and attributable to Replay
Acquisition, Finance of America, New Pubco or any person acting on
their behalf are expressly qualified in their entirety by the
cautionary statements above. Readers are cautioned not to place
undue reliance upon any forward-looking statements, which speak
only as of the date made. Each of Replay Acquisition, Finance of
America and New Pubco expressly disclaims any obligations or
undertaking to release publicly any updates or revisions to any
forward-looking statements contained herein to reflect any change
in their expectations with respect thereto or any change in events,
conditions or circumstances on which any statement is based, except
as required by law.
No Offer or Solicitation
This press release is not a proxy statement or solicitation of a
proxy, consent, or authorization with respect to any securities or
in respect of the proposed business combination. This press release
shall also 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 states or jurisdictions 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 Securities
Act of 1933, as amended, or an exemption therefrom.
View source
version on businesswire.com: https://www.businesswire.com/news/home/20201013005587/en/
For Finance of America Investor Relations:
ir@financeofamerica.com
For Finance of America Media: pr@financeofamerica.com
For Replay Acquisition Corp.: info@replayacquisition.com
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