Realogy is selling the majority of its portion of the Title Resource Guarantee
Realogy Holdings Corp. sells a controlling interest in its title business to a private investment firm for $ 210 million, which it will use to invest in its other businesses and to repay debt.
Realogy will retain a 30 percent stake in Title Resources Guaranty Co. through a joint venture with Centerbridge Partners, which will hold 70 percent of the shares.
The transaction, valued at $ 300 million by Title Resources Guaranty, “unlocks capital and allows Realogy to continue investing in the integration of core real estate transaction services in the areas of franchise, brokerage, property management and trust, and mortgage,” said Realogy .
Realogy will continue to retain existing ownership of the Realogy Title Group, which last year provided title, settlement and fiduciary services to 214,000 transactions in 43 states under 45 different brand names.
“While we really like our title insurance underwriter, this agreement allows us to focus even more on Realogy’s core businesses, including critical consumer-facing transactional services in the areas of franchise, brokerage, title settlement and fiduciary, and mortgage,” said Ryan., CEO of Realogy Schneider said in a statement.
When reporting the strongest first quarter earnings ever in April, Realogy executives said their mortgage and securities businesses are playing a growing role in the company’s profitability and that they have plans to invest in unique products including Listing Concierge, RealVitalize, the developer portal iProspect and RealSure iBuying platform.
In addition to investing in the company’s future, Realogy has continuously repaid billions in debt acquired when a subsidiary of private equity firm Apollo Management LP leveraged the company in a leveraged buyout in 2007 and during the property crash that followed and the 2007-2009 recession.
Realogy posted a loss of $ 1.9 billion in 2008 and ended the year with $ 6.76 billion in debt. When Realogy went public again in 2012, it was still over $ 7 billion in the red, but was able to reduce debt by $ 2.8 billion when it went public.
This year, the company is taking advantage of its stronger financial position and low interest rates to issue bonds that it will use to pay off higher-interest loans.
Last month, Realogy announced that it had used the cash on hand to pay off $ 435 million in term loans due in 2023 and 2025. The repayment reduced the company’s annual interest expense by $ 10 million and left the company in gross debt of approximately $ 3.045 billion.
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