Walker & Dunlop Inc. on Friday entered into a definitive agreement to acquire CWCapital LLC, an operating subsidiary of CW Financial Services LLC , which is wholly owned by funds managed by affiliates of FortressGroup LLC. The purchase price will total $220 million, $80 million in cash and approximately $140 million in Walker & Dunlop stock, subject to potential adjustment based on changes in the Company’s stock price pending closing. Upon the transaction’s close, it is expected that CW Financial will become the company’s largest shareholder.
CWCapital is a lender to the multifamily, healthcare and commercial real estate industries with in-house origination capabilities for Fannie Mae, Freddie Mac, HUD, lifeand conduits. CWCapital originated $3.7 billion of loans in 2011. Founded in 1972 in Needham, MA, CWCapital currently has approximately 180 employees, services $16.8 billion in commercial mortgages, and has closed over $20 billion in commercial real estate financing since 1994. Michael Berman, CEO of CWCapital, will take a senior leadership role at Walker & Dunlop.
“We are thrilled to announce this acquisition. CWCapital is an exceptional company with an outstanding team and a corporate culture very similar to Walker & Dunlop’s,” Walker & Dunlop Chairman, President and CEO Willy Walker said in a statement. “The combined company will be one of the largest commercial real estate lenders in the United States. CW’s people, credit discipline, and client focus are highly regarded throughout the industry. It’s a wonderful accomplishment to bring these two fantastic companies together and create a true industry force.”
“This is an exciting opportunity that will bring together two exceptional teams,” Michael Berman said in a statement. “The greatest strength of these companies is our people, and this combination will position Walker & Dunlop for substantial future growth.”
The transaction is expected to close within 90 to 120 days and is subject to stockholder, governmental and regulatory approvals.