A definitive agreement has been reached
Mortgage REIT companies Ellington Financial and Arlington Asset Investment have entered into a definitive merger agreement, creating a combined company with an equity capital base of over $1.5 billion.
Following the merger, both firms will form a combined company under the name Ellington Financial Inc. An 8-K filing noted that the Ellington stockholders are expected to own 85% of the combined company’s stock, while Arlington stockholders will assume 15%. The shares of the new company will continue to trade on the NYSE under the existing ticker symbol “EFC.”
Ellington CEO Laurence Penn commented on the merger: “We are extremely excited about the opportunity to add a significant portfolio of assets – particularly low-coupon mortgage servicing rights – that align very well with our expertise and existing management platform.”
Penn added that this acquisition will result in greater operating efficiencies, a larger market capitalization, and attractive long-term unsecured debt and preferred equity capital.
Read more: Ellington Residential Mortgage REIT publishes Q4 financial report
“Upon closing, we believe that we will be positioned well to drive accretive earnings growth and provide strategic and financial benefits to our stockholders,” he said.
“We are thrilled to combine AAIC with the Ellington Financial team to make a combined company that we believe will be positioned to take advantage of opportunities into the future,” said J. Rock Tonkel, Jr., CEO of Arlington Asset Investment. “This transaction combines two complementary portfolios, and we look forward to working closely with the Ellington Financial team to complete the acquisition and deliver value for our stockholders.”
The firms’ boards of directors have unanimously approved the deal, which is expected to close in the fourth quarter of 2023.
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