H&R Block agreed to sell the mortgage loan servicing business of its troubled subprime mortgage arm, Option One Mortgage Corp., to distressed-asset investor WL Ross & Co. in a deal that could have a value of more than $1 billion.
INFO SOURCES
H&R Block Inc. (HRB)
FIRMS
H&R Block (HRB) is the world's preeminent tax services provider, having served more than 400 million clients since 1955 and generating annual revenues of $4 billion in fiscal year 2007. H&R Block provides income tax return preparation and related services and products via a nationwide network of approximately 13,000 company-owned and franchised offices and through TaxCut(R) online and software solutions. The company also provides business services through RSM McGladrey and certain consumer financial services.
ADVISORS
H&R Block's financial advisor in connection with the transaction was Lazard Freres & Co. LLC; legal advice was provided by the Jones Day law firm. WL Ross & Co. was represented by Weil, Gotshal & Manges.
NOTE
WL Ross & Co. previously agreed to acquire $42 billion in mortgage servicing rights from American Home Mortgage Investment. The combined total of $95 billion will produce the second-largest subprime servicing portfolio in the U.S., just behind Countrywide Financial. Countrywide was in subprime mortgage trouble when it was purchased by Bank of America for $4.1 billion in January.
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