Rithm Capital Corp. and Great Ajax Corp. Complete Transaction
Rithm Capital and Great Ajax have finalized their previously announced transaction. Great Ajax is now under a management agreement with an affiliate of Rithm, transitioning from a residential loan platform to a commercial real estate-focused vehicle. Rithm anticipates strategic benefits from this shift and synergies with its operating platforms. The transaction was first announced on February 26, 2024, and approved by Great Ajax stockholders on May 20, 2024. Rithm also purchased 2.9 million shares of Great Ajax common stock.
- Completion of the transaction between Rithm Capital and Great Ajax.
- Great Ajax transitioning to a commercial real estate-focused strategy.
- Anticipated strategic benefits and synergies from Rithm's operating platforms.
- Great Ajax stockholders approved the transaction.
- Rithm purchased 2.9 million shares of Great Ajax common stock, indicating confidence in the company's future.
- Uncertainty around the efficacy of the new commercial real estate-focused strategy.
- Possible risks associated with transitioning from a residential loan platform.
Insights
The completion of the transaction between Rithm Capital Corp. and Great Ajax Corp. is a noteworthy event that real estate and asset management investors should keep an eye on. Rithm's acquisition of 2.9 million shares of Great Ajax represents a substantial investment in the company's future. This move suggests confidence in the strategic shift from a legacy residential loan platform to a more opportunistic commercial real estate focus.
Synergies created from this merger can lead to improved efficiencies and cost savings, which could translate into better financial performance for both entities over time. Investors should monitor the integration process to see if these synergies materialize as projected.
Moreover, the change in focus from residential to commercial real estate could potentially offer higher returns. Commercial real estate often provides more stable and lucrative income streams compared to residential properties. However, with this change, investors should also consider the risks associated with commercial real estate investments, such as market volatility and economic downturns impacting commercial property values.
This transaction indicates a strategic pivot for Great Ajax, which could potentially enhance its market position. By refocusing on commercial real estate, Great Ajax can tap into a different segment of the real estate market, potentially accessing more lucrative investment opportunities.
For retail investors, this transition could signify an opportunity for growth, especially if the commercial real estate market remains robust. However, it's important to keep an eye on commercial real estate trends and economic indicators that could affect this sector.
The management agreement with Rithm's affiliate suggests a streamlined and potentially more effective management structure. This could lead to better execution of the new investment strategy, but investors should closely watch initial performance metrics to gauge the success of this transition.
The transaction marks a significant milestone for Great Ajax, with plans to transition the company from a legacy residential loan platform into an opportunistic vehicle focused on commercial real estate. Additionally, Rithm expects that Great Ajax will realize strategic benefits from synergies with Rithm’s operating platforms and from the change in direction of its investment program. Rithm is focused on delivering strong results for Great Ajax stockholders as it embarks on a new chapter.
“We are excited to close this transaction as we continue to invest in the strategic growth of our global asset management platform,” said Michael Nierenberg, Chairman, Chief Executive Officer and President of Rithm. “We believe this transaction positions Great Ajax to pursue a focused commercial real estate investment strategy that will unlock value for stockholders.”
The transaction was previously announced on February 26, 2024, and was approved by Great Ajax stockholders on May 20, 2024. With the completion of the transaction, Rithm purchased 2.9 million shares of Great Ajax common stock from Great Ajax pursuant to the terms of a stock purchase agreement.
Forward-Looking Statements
This communication contains forward-looking statements within the meaning of the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. Forward-looking statements are not historical in nature and can be identified by words such as “believe,” “expect,” “anticipate,” “estimate,” “project,” “plan,” “continue,” “intend,” “should,” “would,” “could,” “goal,” “objective,” “will,” “may,” “seek” or similar expressions or their negative forms. Forward-looking statements are subject to numerous assumptions, risks and uncertainties, which change over time and are beyond our control. Forward-looking statements speak only as of the date they are made. Rithm and Great Ajax do not assume any duty or obligation (and do not undertake) to update or supplement any forward-looking statements. Because forward-looking statements are, by their nature, to different degrees, uncertain and subject to numerous assumptions, risks and uncertainties, actual results or future events, circumstances or developments could differ, possibly materially, from those that Rithm and Great Ajax anticipated in its forward-looking statements, and future results and performance could differ materially from historical performance. Factors that could cause or contribute to such differences include, but are not limited to, those set forth in the section entitled “Risk Factors” in Rithm and Great Ajax’s most recent Annual Reports on Form 10-K and Quarterly Reports on Form 10-Q filed with the SEC, and other reports filed by Rithm and Great Ajax with the SEC, copies of which are available on the SEC’s website, www.sec.gov . The list of factors presented here is not, and should not be, considered a complete statement of all potential risks and uncertainties. Unlisted factors may present significant additional obstacles to the realization of forward-looking statements.
About Rithm Capital
Rithm Capital is a global asset manager focused on real estate, credit and financial services. Rithm makes direct investments and operates several wholly-owned operating businesses. Rithm’s businesses include Sculptor Capital Management, Inc., an alternative asset manager, as well as Newrez LLC and Genesis Capital LLC, leading mortgage origination and servicing platforms. Rithm Capital seeks to generate attractive risk-adjusted returns across market cycles and interest rate environments. Since inception in 2013, Rithm has delivered approximately
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Rithm
Investor Relations
(212) 850-7770
ir@rithmcap.com
Media
Sarah Salky / Erik Carlson
Joele Frank, Wilkinson Brimmer Katcher
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Source: Rithm Capital Corp. and Great Ajax Corp.
FAQ
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