Strategic acquisition marks expansion into direct-to-consumer retail channel, underscores commitment to expanding access to home equity solutions for America’s retirees
Finance of America Companies Inc., a leading specialty finance and solutions platform, announced it will acquire assets of American Advisors Group (“AAG”), a leading direct-to-consumer reverse mortgage lender, in exchange for a combination of cash and equity. The transaction underscores FOA’s commitment to invest in businesses that have strong growth potential with structural and demographic tailwinds.
Commenting on bringing AAG’s direct-to-consumer retail channel under the FOA umbrella, Graham A. Fleming, FOA President and Interim Chief Executive Officer, said, “We believe home equity will be an increasingly important asset for Americans to consider in order to supplement their incomes, especially in retirement. We are confident that our expansion into this direct-to-consumer retail channel will position us to further educate, grow and service this market while driving enhanced value and opportunities for our customers, employees, partners and investors.”
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Upon completion of the deal, which is expected to be accretive to both Tangible Book Value and Earnings Per Share, FOA’s subsidiary, Finance of America Reverse LLC, will operate a separate direct-to-consumer retail channel under the brand name AAG, whose ads currently reach over 10 million consumers annually in various ways, including the use of celebrity spokesperson Tom Selleck. The transaction is expected to close in the first half of 2023, subject to customary closing conditions and regulatory approvals.
In support of this transaction, existing stockholders of the Company, including entities affiliated with Brian L. Libman, the Company’s chairman and founder, have committed to invest an additional $30 million of capital into the Company through a private placement of FOA’s common stock. The investment is conditioned upon customary closing conditions, including the closing of the AAG transaction.
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Kristen Sieffert, President of Finance of America Reverse, said, “This is an incredibly exciting day for our organizations and ultimately those we serve. By complementing FAR’s thought leadership and innovation with AAG’s unmatched investments in consumer awareness, we are strengthening a movement to change society’s retirement trajectory for the better and bringing FOA closer to its goal of helping more Americans thrive.”
Additional details of the transaction can be found in the Current Report on Form 8-K that has been concurrently filed by FOA with the SEC.
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