Accredited Home Lenders Holding Co. hopes to significantly boost its retail originations with its acquisition of Aames Investment Corp.
The two companies announced the deal today, noting the combined entity with 121 retail branches would be the sixth largest nonprime retail originator. During 2005, combined mortgage production from both companies was reported at $23.4 billion.
The merger, already approved by the boards of both companies, is expected to close during the third quarter, the companies said.
San Diego-based Accredited will pay $340 million for Aames, with $102 million paid in cash, according to the announcement.
"We expect to reduce non-interest expenses significantly by eliminating redundant overhead and operating costs, as well as by merging Aames' wholesale group with little overlap," said Accredited Chairman and CEO James A. Konrath in the statement. "We anticipate being able to improve Aames' profitability by enhancing the execution of whole-loan sale and securitization activity, as well as lowering the cost of funds."
Subprime Lender May be Acquired
A California-based subprime lender has announced there is a good chance it will be acquired this quarter.