Ares Commercial Real Estate Corp. (ACRE) announced that it has entered into a definitive agreement to acquire EF&A Funding, L.L.C, d/b/a Alliant Capital LLC from The Alliant Company, LLC and Alliant Inc., for about $62.8 million through a combination of cash and stock.
As per the terms of the transaction, Alliant Capital LLC is expected to become a wholly owned taxable REIT subsidiary of ACRE. Alliant Capital, Ltd., which on a national scale provides tax credit equity for the financing and development of affordable housing, is not included in the acquisition and will remain a part of The Alliant Company.
With about 90 employees located across 15 offices throughout the U.S., Alliant Capital LLC is a financial services company focused on multi-family lending that has developed a significant origination, asset management and servicing platform.
As of March 31, 2013, Alliant Capital LLC had a servicing portfolio of approximately $3.9 billion in multi-family loans with mortgage servicing rights as of December 31, 2012 at a fair value of approximately $61.0 million.
ACRE expects the transaction to be accretive to its earnings per share and provide several strategic benefits for shareholders.
The Alliant Company and Alliant Inc. will receive 588,235 shares currently valued at approximately $9.9 million, using Ares Commercial Real Estate Corporation's closing stock price on May 14, 2013, plus an additional $52.9 million in cash, subject to certain adjustments. The cash portion of the transaction may be financed through additional debt financing, potential issuances of common or preferred stock and/or the repayment or sale of certain assets.
The transaction is expected to close in the second half of 2013. However, there can be no assurance that the transaction will be completed during this period or at all.
Separately, Ares Commercial Real Estate announced that its board has appointed one of its directors, Todd Schuster, to join John Bartling Jr., as Co-Chief Executive Officer of ACRE effective June 1, 2013. Bartling also serves as Global Head of Ares Real Estate Group. In addition, Schuster has been named a Senior Partner in the Real Estate Group of Ares Management LLC.
Previously, Schuster was the Founder, Chief Executive Officer and a member of the Board of Directors of CW Financial Services, serving from its inception in 1991 until 2009. In September 2002, Schuster led the merger of CW Financial Services with a subsidiary of the Caisse de Depot et Placement du Quebec, one of Canada's largest pension fund manager.
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