AG Mortgage Investment to acquire Western Asset in stock and cash deal

AG Mortgage Investment Trust (MITT) and Western Asset Mortgage Capital (WMC) announced that they have entered into a definitive merger agreement, pursuant to which MITT will acquire WMC in a fixed exchange ratio stock/cash transaction. WMC has terminated its previously announced acquisition agreement with Terra Property Trust, Inc. in accordance with the terms of such agreement. MITT’s common stock closing price on the New York Stock Exchange (the “NYSE”) on August 7, 2023, implies a transaction value of $11.23 per WMC common share, consisting of stock consideration of $10.11 per share and cash consideration of $1.12 per share, representing a 34% premium to WMC’s unaffected closing stock price on the NYSE on July 12, 2023. “We are very pleased to have reached an agreement to acquire WMC in a combination that presents a compelling, value-maximizing opportunity for both MITT and WMC stockholders,” said T.J. Durkin, President, Chief Executive Officer, and board member of MITT. “We are confident that combining these highly complementary portfolios will help scale our platform, generate greater operational efficiencies, cost synergies, and accretive earnings growth, and benefit all stockholders. We look forward to moving swiftly to complete this transaction.” Each share of WMC common stock will be converted at closing into the right to receive 1.5 shares of MITT common stock for a total of 9.2 million shares, pursuant to a fixed exchange ratio, subject to adjustment based on the companies’ respective transaction expenses,1 and a cash payment from Angelo Gordon equal to approximately 9.99% of the aggregate per share merger consideration (not to exceed $7 million in total). Upon the closing of the transaction, MITT stockholders are expected to own approximately 69% of the combined company’s stock, while WMC stockholders are expected to own approximately 31% of the combined company’s stock. Upon completion of the merger, MITT’s President and Chief Executive Officer, T.J. Durkin, will serve as Chief Executive Officer of the combined company, which will continue to operate as “AG Mortgage Investment Trust, Inc.” and be managed by AG REIT Management, LLC, an affiliate of Angelo Gordon. MITT’s Board of Directors will be increased from six to eight directors to include two WMC-designated directors. The combined company will be headquartered in New York and will continue to trade on the NYSE under MITT’s current ticker symbol. The transaction has been unanimously approved by the Boards of Directors of MITT and WMC and external managers of MITT and WMC. The transaction is expected to close in the fourth quarter of 2023, subject to the respective approvals by the stockholders of MITT and WMC and other customary closing conditions set forth in the merger agreement.