Two mortgage REITS to merge

by Francis Monfort30 Apr 2018

Hybrid mortgage REIT Two Harbors Investment and agency mortgage REIT CYS Investments have announced that they have agreed to merge.

Under the agreement, Two Harbors will acquire CYS. After the deal’s completion, all senior management positions will continue to be led by Two Harbors’ personnel. The Two Harbors board will be expanded to include two additional independent directors from CYS Investments’ current board, James Stern and Karen Hammond.

According to the companies, anticipated benefits from the merger include additional capital to support continued growth in target assets, improved cost structure, and a more diversified business model, among other benefits.

“We are pleased to announce the acquisition of CYS Investments, which we believe represents a unique opportunity to create value for our stockholders,” Two Harbors President and CEO Thomas Siering said. “This transaction offers Two Harbors stockholders the opportunity to benefit from additional capital, supporting continued growth in our target assets, as well as an improved cost structure. The combination of the two companies also supports the potential for the premium valuation of a pro forma Two Harbors.”

The closing of the deal is subject to the satisfaction of certain customary conditions and is subject to the approval of the stockholders of both companies. Two Harbors and CYS expect the transaction to close in the third quarter.

 

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