Business Context and Reporting Period
This Form 8-K Current Report was filed by Finance of America Companies Inc. on February 2, 2023, covering events occurring on January 31 and February 1, 2023. The Company is a Delaware corporation with principal executive offices in Plano, Texas, and its Class A Common Stock trades on the New York Stock Exchange under the symbol "FOA."
Key Financial Metrics and Agreements
- Asset Sale Transaction: Incenter LLC, an indirect subsidiary, entered into a Securities Purchase Agreement to sell 100% of Agents National Title Holding Company (ANTIC) and Boston National Holdings LLC (BNT) to Essent US Holdings, Inc.
- Transaction Value: The base cash purchase price is $100,000,000, subject to customary adjustments.
- Debt Facility Amendment: Finance of America Equity Capital LLC amended its revolving working capital promissory notes with Blackstone Inc. affiliates and an entity controlled by Brian L. Libman.
- Debt Capacity: Aggregate commitments increased from $50.0 million to $60.0 million.
- Debt Terms: Maturity extended from July 31, 2023, to October 31, 2023. Interest rate is 6.5% per annum. Notes are secured by tangible assets and feature simultaneous draw and paydown terms.
Material Changes and Conditions
The filing details a strategic divestiture of the title insurance segment (ANTIC and BNT) and an expansion of liquidity facilities. The asset sale is contingent upon regulatory approvals, specifically from the Missouri Commissioner of Insurance and the California Insurance Commissioner. The debt amendment provides additional liquidity for growth initiatives and general corporate purposes.
Outlook, Risks, and Contingencies
- Closing Timeline: The Initial Termination Date for the asset sale is September 1, 2023. This date automatically extends to December 1, 2023, if all closing conditions are met except for outstanding governmental approvals.
- Termination Rights: Either party may terminate the Securities Purchase Agreement if the transaction has not closed by the termination date.
- Risk Factors: Management highlights risks regarding the inability to complete the proposed transaction in a timely manner or at all. Actual results may differ materially from forward-looking statements due to regulatory hurdles and other uncertainties.
Investor Verification Checklist
- Verify the status of required regulatory consents from Missouri and California insurance commissioners.
- Confirm the final purchase price adjustments and the expected closing date for the $100 million asset sale.
- Review the specific tangible assets securing the amended $60 million revolving credit facility.
- Monitor for any updates regarding the pre-closing restructuring of subsidiaries retained by Incenter versus those sold.