PSM Holdings Inc. of Roswell, N.M., is making its second deal in the Northeast in recent weeks, having entered into a letter of intent to purchase American Trust Mortgage Inc., a mortgage broker in the Boston area.
PSM, which announced the deal Wednesday, intends to issue 857,143 shares of common stock to the shareholders of American Trust at the closing of the proposed transaction, according to a Securities and Exchange Commission filing Thursday.
A definitive agreement should be signed within 30 days. American Trust will become a subsidiary of PrimeSource Mortgage Inc. The parties intend to negotiate an employment agreement for the key shareholder of American Trust, Paul Mignone, to join PSM at closing.
Last week, PSM completed its purchase of United Community Mortgage Corp., a Federal Housing Administration-approved mortgage banker in New York and New Jersey.
UCMC's sole shareholder, Edward Kenmure, received 2.4 million shares of PSM common stock as part of the deal; an SEC filing said he now owns 14% of the company.
The filing said that Kenmure also entered into a full-time employment agreement with PrimeSource to serve as vice-president.
PSM previously said one of the motivations for the deal was to become an FHA-approved lender.