Bimini Mortgage Management Inc. and Opteum Financial Services LLC have agreed to merge.
Bimini is a publicly traded Vero Beach, Fla., real estate investment trust that has invested primarily in agency residential mortgage securities. It has no origination arm.
Opteum, a nonprime-focused lender, says it expects to originate or acquire about $7.4 billion of mortgages in the fiscal year that ends Nov. 30. The privately held company is based in Paramus, N.J., has about 1,000 employees and 30 offices, and lends in 44 states.
Under the merger deal, which was announced Thursday and is expected to close in November, Bimini would issue to Opteum stockholders about 3.7 million Class A common shares and 1.8 million preferred shares, which would be convertible to Class A stock if Bimini shareholders approved.
Bimini would also lend about $65 million to Opteum to repay debt, and pay Opteum stockholders a contingent cash earnout of up to $17.5 million over five years.
The parties said Opteum must have a book value of at least $60 million at the time the deal closes. The merger is expected to boost Bimini’s earnings next year.
C. Douglass Garrett, the director of research at Flagstone Securities LLC, said the total consideration appears to be $80 million.
Opteum would become a taxable subsidiary of Bimini. Peter R. Norden would remain Opteum’s chairman, president, and CEO and become a senior executive vice president and a director of Bimini. Martin J. Levine, an Opteum co-founder, would remain its chief operating officer. Rick E. Floyd, an Opteum shareholder, would continue to head its origination and production operations.
