Walter Investment Management Corp. has agreed to sell Green Tree Insurance Agency to a wholly owned subsidiary of insurance company Assurant.
Assurant agreed to pay $125 million in cash with a potential earn-out of up to $25 million based on the gross written premium of certain voluntary homeowners’ insurance written by certain affiliates of Assurant over a specified timeframe. Following the deal, Green Tree will operate as an indirect, wholly owned subsidiary of Assurant.
Green Tree sells voluntary homeowners’ and manufactured housing insurance policies, among other products. The agency earned $31 million in revenue during the first nine months of 2016.
Assurant expects the deal to close in the first quarter of 2017, pending closing conditions and regulatory approval. Walter sought the sale as part of an effort to simply its business.
“This transaction is expected to reduce the complexity of our business operations and allow us to better focus on our process efficiency efforts to improve the performance of our core servicing and originations businesses,” Walter CEO and President Anthony Renzi said in a news release. “We look forward to continuing our relationship with Assurant.”
Assurant said it will retain the existing book of voluntary insurance for mortgage borrowers whose loans are serviced by Walter subsidiary Ditech Financial Services. The company will also have the opportunity to write new voluntary insurance for Ditech borrowers.