TPG Mortgage Investment Trust Inc. (NYSE: MITT), a residential mortgage REIT, is acquiring Cherry Hill Mortgage Investment Corp. (NYSE: CHMI), also a residential mortgage REIT, for $117.5 million.
In connection with the transaction, holders of Cherry Hill common stock will receive 0.3063 shares of TPG common stock and $0.93 in cash per share. Based on the closing price of TPG’s common stock on the New York Stock Exchange on Aug. 7, the transaction implies a value of $3.10 per share of Cherry Hill common stock, offering a 29% premium to Cherry Hill shareholders through a mix of stock and cash.
On a pro forma basis, following the closing of the transaction, the TPG stockholders are expected to own approximately 73% of the combined company’s equity, and the Cherry Hill stockholders are expected to own approximately 27%.
The combined company will have a $9 billion residential mortgage portfolio and will operate as TPG Mortgage Investment Trust, led by the existing TPG management team including TJ Durkin as president and CEO. Cherry Hill will designate two independent directors to be added to the board of directors, expanding the board to eight members. The combined company will be headquartered in New York City, and its common stock will continue to be listed on the NYSE under the MITT ticker symbol.
“This combination represents a transformational, value-creating opportunity for both MITT and CHMI stockholders,” said Durkin. “We are excited to bring together two highly complementary portfolios to significantly enhance the scale of MITT’s residential mortgage platform, which we believe will generate meaningful operational efficiencies and deliver accretive earnings growth for the benefit of all stockholders. We look forward to completing this transaction and replicating the success we achieved when we acquired Western Asset Mortgage Capital Corporation in 2023.”
Joseph Murin, chairman of Cherry Hill’s board of directors, stated, “After conducting a thorough competitive process with the assistance of our financial advisor, the board unanimously determined that this transaction with MITT is in the best interest of CHMI and its stockholders. We believe this combination will unlock substantial value for all stockholders and we are excited about the value the combination can achieve.”
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