BETHESDA, MD. — Walker & Dunlop (NYSE: WD) has agreed to purchase lender CWCapital for $220 million. The combination creates one of the largest commercial real estate lenders in the U.S. with $7.7 billion of loan originations in 2011. The acquisition also makes Walker & Dunlop the second largest multifamily lender nationally.
The servicing portfolio of the combined entity exceeds $33.7 billion, according to Walker & Dunlop.
The purchase price will include $80 million in cash and about $140 million in Walker & Dunlop stock. The price is subject to potential adjustment based on the company's stock price pending closing.
"CWCapital is an exceptional company with an outstanding team and corporate culture very similar to Walker & Dunlop's," says Willy Walker, chairman, president and CEO of Walker & Dunlop. "CW's people, credit discipline and client focus are highly regarded throughout the industry. It's a wonderful accomplishment to bring these two fantastic companies together and create a true industry force."
Based in Bethesda, Walker & Dunlop originates and sells a range of multifamily and other commercial real estate financing products.
After the deal closes CW Financial will become Walker & Dunlop's largest shareholder. Michael Berman, CEO of Needham, Mass.-based CWCapital, will take a senior leadership role at Walker & Dunlop.
"This is an exciting opportunity that will bring together two exceptional teams," says Berman. "The greatest strength of these companies is our people, and this combination will position Walker & Dunlop for substantial future growth."
CWCapital is a lender to the multifamily, healthcare and commercial real estate industries. CWCapital is an operating subsidiary of CW Financial Services LLC, owned by funds managed by affiliates of Fortress Investment Group.
The firm employs 180 people, services $16.8 billion in commercial mortgages and has closed more than $20 billion in commercial real estate since 1994. Last year, the company originated over $3.7 billion in loans.
The transaction is expected to close within 90 to 120 days, subject to stockholder, governmental and regulatory approvals.
The stock price of Walker & Dunlop closed at $11.26 per share on Thursday.
— Liz Burlingame
