UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
Date of Report (Date of earliest event reported): August 28, 2017
ALTISOURCE PORTFOLIO SOLUTIONS S.A.
(Exact name of Registrant as specified in its Charter)
Luxembourg | 001-34354 | 98-0554932 | ||||
(State or other jurisdiction of incorporation) | (Commission File Number) | (I.R.S. Employer Identification No.) | ||||
40, avenue Monterey
L-2163 Luxembourg
Grand Duchy of Luxembourg
(Address of principal executive offices including zip code)
+352 2469 7900
(Registrant’s telephone number, including area code)
NOT APPLICABLE
(Former name or former address, if changed since last report)
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2. below):
o | Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425) |
o | Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12) |
o | Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b)) |
o | Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c)) |
Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).
Emerging growth company o |
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. o |
Item 7.01 Regulation FD Disclosure.
Altisource Portfolio Solutions S.A. (the “Company”) has made available on its corporate website (www.altisource.com) an investor presentation that includes an overview of its agreements with New Residential Investment Corp. The Company intends to use this investor presentation on a conference call with investors on August 29, 2017 and from time to time in conversations with investors, analysts and others. A copy of the presentation dated August 28, 2017 is filed herewith as Exhibit 99.1.
The Company is furnishing this Form 8-K pursuant to Item 7.01, “Regulation FD Disclosure.” The information contained in this Form 8-K (including Exhibit 99.1) shall not be deemed “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), or otherwise subject to the liabilities of that section, nor shall it be deemed incorporated by reference in any filing under the Securities Act of 1933, as amended, or the Exchange Act, except as shall be expressly set forth by specific reference in such a filing.
Item 9.01 Financial Statements and Exhibits.
(d) Exhibits.
Exhibit No. | Description | |
Exhibit 99.1 | Altisource Portfolio Solutions S.A. Investor Presentation - Overview of Transaction with New Residential Investment Corp. dated August 28, 2017 | |
SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
Date: August 28, 2017
Altisource Portfolio Solutions S.A. | |||
By: | /s/ Kevin J. Wilcox | ||
Name: | Kevin J. Wilcox | ||
Title: | Chief Administration and Risk Officer | ||
© 2017 Altisource. All rights reserved.
Overview of
Transaction with
New Residential
Investment Corp.
August 28, 2017
Any copying, distribution or use of any of the information contained herein that is not expressly permitted
by Altisource in writing is STRICTLY PROHIBITED. Altisource, the Altisource logo, the “REAL” family of
trademarks and service marks, and certain other marks identified herein are trademarks or service marks
of Altisource Solutions S.á r.l. or its subsidiaries. © 2017 Altisource. All rights reserved.
Exhibit 99.1
1 © 2017 Altisource. All rights reserved.
This presentation contains forward-looking statements that involve a number of risks and uncertainties. These forward-looking statements include all
statements that are not historical fact, including statements about management’s beliefs and expectations. These statements may be identified by
words such as “anticipate,” “intend,” “expect,” “may,” “could,” “should,” “would,” “plan,” “estimate,” “seek,” “believe,” “potential” and similar
expressions. Forward-looking statements are based on management’s beliefs as well as assumptions made by and information currently available to
management. Because such statements are based on expectations as to the future and are not statements of historical fact, actual results may differ
materially from what is contemplated by the forward-looking statements. Altisource undertakes no obligation to update any forward-looking
statements whether as a result of new information, future events or otherwise. The risks and uncertainties to which forward-looking statements are
subject include, but are not limited to, various risks relating to the transactions described herein, including in respect of the satisfaction of closing
conditions to New Residential Investment Corp.’s acquisition of the covered MSR portfolios, including obtaining the necessary third-party approvals;
uncertainties as to the timing or completion of transfers related to New Residential Investment Corp.’s acquisition of the covered MSR portfolios;
litigation relating to the transactions; the possibility of early termination of the Brokerage Agreement; the possibility that Altisource and New
Residential Investment Corp. will not be able to negotiate a satisfactory services agreement; the inability to obtain, or delays in achieving, the
expected benefits of the transactions, as well as, Altisource’s ability to integrate acquired businesses, retain key executives or employees, retain
existing customers and attract new customers, general economic and market conditions, behavior of customers, suppliers and/or competitors,
technological developments, governmental regulations, taxes and policies, availability of adequate and timely sources of liquidity and other risks and
uncertainties detailed in the “Forward-Looking Statements,” “Risk Factors” and other sections of Altisource’s Form 10-K and other filings with the
Securities and Exchange Commission.
Adjusted Earnings Per Share – Diluted is a non-GAAP measure used by management, existing shareholders, potential shareholders and other users
of our financial information to measure Altisource’s performance and does not purport to be an alternative to diluted earnings per share. It excludes
amortization expense related to acquisitions that occurred in prior periods, as well as the effect of more significant non-recurring items from earnings.
It is management’s intent to provide non-GAAP financial information to enhance the understanding of Altisource’s GAAP financial information, and it
should be considered by the reader in addition to, but not instead of, the financial statements prepared in accordance with GAAP. The non-GAAP
financial information may be determined or calculated differently by other companies. The non-GAAP financial information should not be unduly relied
upon.
The financial projections contained in this presentation are expressly qualified as forward-looking statements and Altisource makes no representation
that the actual financial results will be the same as those set out in the financial projections. These financial projections should not be unduly relied
upon.
Forward-Looking Statements, Estimates and
Non-GAAP Measures
2 © 2017 Altisource. All rights reserved.
Overview
On August 28, 2017, Altisource and New Residential Investment Corp. (“NRZ”) entered
into a Cooperative Brokerage Agreement (the “Brokerage Agreement”) and a Letter of
Intent to enter into a Services Agreement (the “Services LOI”) that we believe strengthen
Altisource’s existing position as a leading services provider to the mortgage industry
‒ Provide greater visibility into revenue and earnings: Having agreements with both NRZ and Ocwen should
further solidify Altisource’s future revenue and earnings associated with the Ocwen Portfolio (defined below)
‒ Expand our customer base: We are establishing a direct relationship with NRZ, one of the largest and most
active owners of non-GSE MSRs in the industry, and another of NRZ’s subservicers
The Brokerage Agreement and the Services LOI
‒ The Brokerage Agreement confirms Altisource as the exclusive provider of brokerage services for real estate
owned (“REO”) from an approximately $110 billion Unpaid Principal Balance (“UPB”)1 of non-agency mortgage
servicing rights (“MSR”) portfolio that NRZ agreed to acquire from certain subsidiaries of Ocwen Financial
Corporation in July 2017 (the “Ocwen Portfolio”) and establishes Altisource as the exclusive provider of
brokerage services for REO from an approximately $6 billion UPB1 non-agency MSR portfolio that NRZ agreed to
acquire from certain subsidiaries of PHH Corporation in December 2016 (the “PHH Portfolio”), subject to PHH
Corporation approving Altisource as a vendor
‒ The Services LOI provides that the parties will negotiate in good faith the execution of a Services Agreement
which we expect will confirm Altisource as the exclusive provider of fee based services in connection with the
Ocwen Portfolio
1 As of June 30, 2017
3 © 2017 Altisource. All rights reserved.
Altisource and NRZ entered into the Brokerage Agreement through certain of their
licensed real estate brokerage subsidiaries
The Brokerage Agreement:
– Provides that Altisource will be the exclusive provider of brokerage services for REO included in the Ocwen
Portfolio and the PHH Portfolio that were acquired, or are to be acquired, by NRZ, irrespective of the sub-
servicer
– Extends through August 2025
– Establishes a direct relationship between the companies
– Provides that NRZ’s licensed real estate brokerage subsidiaries will receive a cooperating brokerage
commission for REO sold by Altisource from the transferred MSRs; Ocwen will no longer receive a
cooperating brokerage commission on REO sales from the transferred MSRs
– Allows Altisource to terminate if a Services Agreement is not signed during the term of the Services LOI
– Includes termination events, vendor oversight, audit rights and reporting requirements
Brokerage Agreement
4 © 2017 Altisource. All rights reserved.
The Services LOI:
– Outlines the terms and conditions pursuant to which the parties may enter into a binding Services Agreement
(the “Services Agreement”)
– Provides that Altisource and NRZ will negotiate, in good faith, a definitive services agreement under which
Altisource will be the exclusive provider of fee based services with respect to the Ocwen Portfolio
– The term of the Services LOI is 30 days, with an automatic extension by 30 days if both parties are
negotiating in good faith at the end of the initial 30 day period
– Provides that NRZ and Altisource will work together to seek further opportunities to expand their relationship
The Services Agreement is expected to:
– Extend through August 2025
– Confirm Altisource as the exclusive provider of fee based services for the Ocwen Portfolio
– Include termination events, vendor oversight, audit rights and reporting requirements
There can be no assurance that the parties will reach an agreement with respect to
the terms of the Services Agreement or that a Services Agreement will be entered into
on a timely basis or at all
Services LOI
5 © 2017 Altisource. All rights reserved.
Financial Information
Altisource expects to continue to generate meaningful revenue and earnings from the
NRZ-owned and Ocwen-owned portfolios1
‒ Between 2018 and 2025, we expect to generate service revenue from these portfolios of approximately $2.0
billion
‒ Between 2018 and 2025, we expect to generate adjusted pretax income from these portfolios of
approximately $700 million
‒ These estimates are based on the existing portfolios and we have not assumed any growth from Ocwen and
NRZ
We believe the benefits of the Brokerage Agreement and Services Agreement to
Altisource will far outweigh the anticipated financial impact
‒ As a result of these agreements and after taking into account certain operational changes, we currently
estimate that diluted earnings per share2 and adjusted earnings per share – diluted2 will be impacted as
follows:
2017 2018 2019
Higher (lower) $(0.06) to $(0.11) $(0.35) to $(0.45) $(0.40) to $(0.50)
1 Based upon our agreements with Ocwen, the Brokerage Agreement and the Services LOI
2 Assumes 18.9 million diluted shares outstanding
6 © 2017 Altisource. All rights reserved.
Altisource’s Growth Initiatives
Growth is driven by our four strategic initiatives that leverage Altisource’s scale and
unique competitive advantages to provide services and solutions to a broader, more
diversified customer base
‒ Servicer Solutions: the solutions, services and technologies typically used or licensed primarily by
residential loan servicers
‒ Origination Solutions: the solutions, services and technologies typically used or licensed by loan
originators (or other similar mortgage market participants) in originating and buying residential mortgages
‒ Consumer Real Estate Solutions: the solutions, services and technologies typically used by home buyers
and sellers to handle key aspects of buying and selling a home
‒ Real Estate Investor Solutions: the solutions, services and technologies used by buyers and sellers of
single family investment homes
7 © 2017 Altisource. All rights reserved.
Investor Relations Information
About Altisource
Altisource Portfolio Solutions S.A. is an integrated service provider and
marketplace for the real estate and mortgage industries. Combining
operational excellence with a suite of innovative services and
technologies, Altisource helps solve the demands of the ever-changing
market.
Contact Information
All Investor Relations inquiries should be sent to:
Investor.relations@altisource.com
Exchange NASDAQ Global Select Market
Ticker ASPS
Headquarters Luxembourg
Employees Approximately 8,000
© 2017 Altisource. All rights reserved.