Arbor Realty TrustInc. has completed its acquisitionof Arbor Commercial Mortgage LLC'sagency platform for $276 million.
The purchase price consisted of $138 million in stock, $88 millionin cash and the issuance of a $50 million seller financing instrument. The stockcomponent was paid with 21.23 million operating partnership units, which was basedon a stock price of $6.50 per share. All Arbor Commercial Mortgage employees directlyrelated to the agency business were acquired as part of the transaction.
The acquired agency businesses included a national multifamilyagency loan origination and servicing platform with more than 200 direct employees,including 20 originators in eight states. The agency platform had a servicing portfoliowith an unpaid principal balance of approximately $12 billion as of June 30.
Additionally, Arbor Realty Trust obtained a two-year option topurchase, for $25 million, the existing management contract and fully internalizethe management structure. Exercising this option is at the discretion of the specialcommittee of Arbor Realty Trust's board.
The special committee of the board retained J.P. Morgan SecuritiesLLC as financial adviser and Willkie Farr & Gallagher LLP as legal adviser forthe acquisition. Skadden Arps Slate Meagher & Flom LLP acted as legal adviserto Arbor Realty Trust. Wells Fargo Securities LLC and Dechert LLP acted as financialand legal advisers to Arbor Commercial Mortgage.