The transaction is expected to close by the end of the first quarter of 2019
Ready Capital and Owens Realty Mortgage have entered into a definitive merger agreement to combine in a stock-for-stock merger.
Ready Capital is a multi-strategy real estate finance company focused on small- to medium-sized balance commercial loans. Owens Realty is a specialty finance REIT that focuses on small-balance and middle-market commercial real estate loans.
The combined company, which will operate under the name Ready Capital, is expected to have pro forma equity capital in excess of $750 million. Based on the closing prices of Owens Realty common shares and Ready Capital's common stock on Nov. 7, the equity market capitalization of the combined company would be approximately $678 million.
The transaction is expected to close by the end of the first quarter of 2019, subject to approval by Owens Realty and Ready Capital stockholders and other customary closing conditions.
Upon completion of the transaction, Ready Capital Chairman and CEO Thomas Capasse will lead the company, and Frederick Herbst, CFO of Ready Capital, will remain CFO. The combined company will be based in New York City. The combined board is expected to have seven directors, consisting of one director from Owens Realty’s existing board and six directors appointed by Ready Capital.
"This merger highlights our continued commitment to driving shareholder value and liquidity. We believe the transaction raises incremental capital with minimal tangible book value dilution and is accretive to forward-looking earnings per share," Capasse said. "The combined company will be in a stronger position to execute our business plan, improve operating and cost efficiencies, and continue growth in a profitable manner."
"We are excited to have reached an agreement for the sale of Owens Realty Mortgage to Ready Capital and believe that our shareholders will benefit from the better access to financing, larger size, and greater resources of the combined company," Owens Realty President Bryan Draper said.
