July 30, 2013 / 9:02 PM / 5 years ago

KCG Holdings sells reverse mortgage unit for $80 million

July 30 (Reuters) - KCG Holdings Inc agreed to sell its reverse mortgage business, Urban Financial Group, to an investor group for $80 million, the automated trading firm said on Tuesday.

The transaction, which is subject to regulatory approval, is expected to be completed in the fourth quarter.

It was the first deal for KCG since it was formed by the $1.4 billion takeover of Knight Capital Group by rival trading firm Getco Holding Co. The deal was completed on July 1.

KCG company said the sale of the unit to the investor group led by Brian Libman would remove around $5.4 billion from its balance sheet and free up around $54 million in excess regulatory capital held as collateral.

Tulsa, Oklahoma-based Urban is one of the largest originators of home equity conversion mortgages, also referred to as reverse mortgages, in the United States.

KCG said it had made the decision to divest Urban after a strategic review resulted in a renewed focus on its core market making and agency execution services businesses.

The financial advisors to KCG on the transaction were Bank of America Merrill Lynch and the legal advisors were Wachtell, Lipton, Rosen & Katz.

0 : 0
  • narrow-browser-and-phone
  • medium-browser-and-portrait-tablet
  • landscape-tablet
  • medium-wide-browser
  • wide-browser-and-larger
  • medium-browser-and-landscape-tablet
  • medium-wide-browser-and-larger
  • above-phone
  • portrait-tablet-and-above
  • above-portrait-tablet
  • landscape-tablet-and-above
  • landscape-tablet-and-medium-wide-browser
  • portrait-tablet-and-below
  • landscape-tablet-and-below