Mr. Cooper Group Inc., the provider of quality servicing, origination, and transaction-based services related principally to single-family residences throughout the United States, has announced that it is selling its title business, which operates under the brand name Title365, to Blend Labs, Inc. for a sum of $500 million. This deal will consist of $450 million in cash, and the rest will be a retained interest of 9.9 percent, subject to certain adjustments.
The company further added that the sale is expected to close in the second quarter of 2021, based on the customary conditions that include regulatory approval. As part of the transaction, Title365 will retain all cash generated once the agreement is signed for the acquirer's benefit. Mr. Cooper Group expects to record the after-tax gain, which is said to approximate $350 million. The net transaction costs and cash taxes will be approximately $400 million upon closing.
Title365 has produced outstanding results in the legal sector that have contributed to its strong profitability and operating momentum over the last year. This deal will help the firm gain tremendous investor credit and have a strategic impact. This decision will allow Mr. Cooper Group to primarily focus on the growth and profitability potential within its legal service business.