Tree.com (TREE) Amends $55.9M Home Loan Unit Sales Agreement w/ Discover (DFS)
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Tree.com, Inc. (Nasdaq: TREE) has signed an amendment to the asset purchase agreement related to the sale of substantially all of the operating assets of its Home Loan Center subsidiary to Discover Financial Services (NYSE: DFS). Home Loan Center, which operates as LendingTree Loans, originates and processes residential mortgage loans in all fifty states and the District of Columbia. The Transaction has previously been approved by the stockholders of Tree.com.
Under the original agreement, $35.9 million was due upon closing with $10 million due on the first and second anniversaries of the closing, for a net purchase price of $55.9 million. Under the terms of the amendment, the deferred portion of the purchase price is accelerated. $3 million is due on March 7, 2012, regardless of whether or not the transaction has closed, $7 million is due at closing and $10 million is due on the first anniversary of the closing. All payments are subject to certain conditions being satisfied.
Under the original agreement, Home Loan Center or Discover could terminate the agreement if closing did not occur on or before October 9, 2011, subject to certain extension rights, including Discover's right to require (through the making of extension payments) up to four additional 30-day extensions beyond November 8, 2011 in certain circumstances. To date, Discover has exercised four extensions, making a total of $5 million in extension payments. As a result, the end date has been extended to March 7, 2012. The end date may be further extended to July 6, 2012, subject to certain conditions under the amendment. All extension payments will be credited against the portion of the purchase price payable at closing.
Under the original agreement, $35.9 million was due upon closing with $10 million due on the first and second anniversaries of the closing, for a net purchase price of $55.9 million. Under the terms of the amendment, the deferred portion of the purchase price is accelerated. $3 million is due on March 7, 2012, regardless of whether or not the transaction has closed, $7 million is due at closing and $10 million is due on the first anniversary of the closing. All payments are subject to certain conditions being satisfied.
Under the original agreement, Home Loan Center or Discover could terminate the agreement if closing did not occur on or before October 9, 2011, subject to certain extension rights, including Discover's right to require (through the making of extension payments) up to four additional 30-day extensions beyond November 8, 2011 in certain circumstances. To date, Discover has exercised four extensions, making a total of $5 million in extension payments. As a result, the end date has been extended to March 7, 2012. The end date may be further extended to July 6, 2012, subject to certain conditions under the amendment. All extension payments will be credited against the portion of the purchase price payable at closing.
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