WMIH Corp. (OTCQB: WMIH), through its wholly-owned subsidiary, WM Mortgage Reinsurance Company, Inc., currently engages in runoff mode reinsurance business with respect to mortgage insurance. In 2012, the company emerged from bankruptcy proceedings as the successor to Washington Mutual, Inc. with limited operations outside of its legacy reinsurance business, and, though it has not written any new business since 2008, WMIH still operates its subsidiary’s existing contracts while actively seeking acquisition opportunities across a broad array of industries.
In January, WMIH secured the capital required to fund future acquisitions through the completion of a private offering of 600,000 shares of series B convertible preferred stock. According to the terms of the offering, the newly issued stock will bear dividends on a cumulative basis when declared by the company’s board of directors at an annual rate of three percent. Upon satisfaction of the conversion contingency, all or a portion of the shares will be mandatorily converted into the company’s common stock. If not converted by the mandatory redemption date, remaining shares of series B preferred stock will be automatically redeemed. Net proceeds of the offering were more than $568 million after payment of all offering fees and expenses.
“The completion of the offering of series B preferred stock provides WMIH significant capital to execute on its acquisition strategies,” Michael Willingham, chairman of WMIH, stated in a news release. “With this capital, we intend to continue to pursue opportunities for acquisitions of [businesses] with operations that are complemented by the experience and expertise of our board and management team.”
Among the largest investors in the offering was KKR & Co. L.P., which purchased 200,000 shares of the available stock. This investment followed a similar strategic investment in December 2013, further demonstrating the confidence that the company’s investors place in its seasoned management team.
“We are pleased to participate in the offering and invest additional capital in WMIH, as we continue to see opportunities for the company to grow and diversify its platform,” stated Tagar Olson, head of KKR’s financial services team. “Having partnered with the company for over a year, we believe that WMIH is well positioned as an acquirer and we believe it is capable of leveraging its resources to drive value as it executes on its acquisition strategy.”
For prospective shareholders, an investment in WMIH represents an opportunity to invest in the future. With financing secured to begin its search for a worthwhile acquisition candidate, the company is in a strong position to pivot its operations into a wide variety of potentially lucrative market sectors. Look for WMIH to leverage its current flexibility in order to promote maximized financial returns in the years to come.
For more information, visit www.wmih-corp.com
