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Plano, Texas-based Finance of America Companies (FOA) has announced that it will acquire the assets of American Advisors Group (AAG), a direct-to-consumer reverse mortgage lender, in exchange for a combination of cash and equity.
“We believe home equity will be an increasingly important asset for Americans to consider in order to supplement their incomes, especially in retirement,” said Graham A. Fleming, FOA President and Interim CEO. “We are confident that our expansion into this direct-to-consumer retail channel will position us to further educate, grow and service this market while driving enhanced value and opportunities for our customers, employees, partners and investors.”
Upon completion of the deal, which is expected to be accretive to both tangible book value and earnings per share, FOA’s subsidiary, Finance of America Reverse LLC, will operate a separate direct-to-consumer retail channel under the brand name AAG, whose ads currently reach more than 10 million consumers annually in various ways, including the use of celebrity spokesperson Tom Selleck. The transaction is expected to close in the first half of 2023.
The deal is subject to customary closing conditions and regulatory approvals.
In support of this transaction, existing stockholders of the company, including entities affiliated with Brian L. Libman, FOA’s Chairman and Founder, have committed to invest an additional $30 million of capital into the company through a private placement of FOA’s common stock. The investment is conditioned upon customary closing conditions, including the closing of the AAG transaction.
“This is an incredibly exciting day for our organizations and ultimately those we serve,” added Kristen Sieffert, President of Finance of America Reverse. “By complementing FAR’s thought leadership and innovation with AAG’s unmatched investments in consumer awareness, we are strengthening a movement to change society’s retirement trajectory for the better and bringing FOA closer to its goal of helping more Americans thrive.”
