Computershare Sells U.S. Mortgage Services Business for AU$720 Million

Computershare Limited (ASX: CPU) has announced a definitive agreement to sell its U.S. Mortgage Services business ("CLS US") to Rithm Capital Corp. for an estimated AU$720 million. This sale aligns with Computershare's strategy to simplify its operations and enhance earnings quality.

CEO Stuart Irving's Statement

Stuart Irving, CEO, and President of Computershare stated, "We have determined that a full divestment of the business would be in the best interests of shareholders. Rithm's strong mortgage industry credentials and successful M&A track record ensure a smooth transition for the business and our customers."

Key Highlights

• Sale Details: The transaction is valued at approximately 1.0x Tangible Net Asset Value as of June 30, 2023, under U.S. GAAP accounting.
• Expected Completion: The sale is subject to customary closing conditions, including regulatory approvals, with completion expected in early Q4 FY24.
• Impact on FY24 EPS: The transaction is not expected to have a material impact on FY24 EPS guidance. The transaction is anticipated to be EPS accretive in the first full year following divestment.
• Post-Transaction Support: Computershare will continue to support the business for up to 12 months under a limited Transitional Services Agreement.

Improving Capital Intensity and Cash Flow

The transaction is expected to improve Computershare's capital intensity and cash flow profile, with pro-forma impacts indicating positive changes across various financial metrics.

Statutory Pre-Tax Loss on Sale

Under IFRS accounting, the sale is expected to result in a one-off statutory pre-tax loss ranging from AU$150 million to AU$180 million. This non-cash impairment will not affect Computershare's underlying performance or cash flow.

This strategic move allows Computershare to refocus on its core businesses, positioning it for future growth and opportunities in the market.

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