| Item 7.01. | Regulation FD Disclosure. |
On February 21, 2023, Finance of America Companies Inc., a Delaware corporation (the “Company”) issued a statement to announce the sale of certain operational assets of Finance of America Mortgage LLC, a Delaware limited liability company (“FAM”), an indirect subsidiary of the Company, doing business as Finance of America Commercial (“FACO”) to Roc Capital Holdings LLC, a Delaware limited liability company (the “Buyer”). A copy of the Company’s statement is furnished as Exhibit 99.1 hereto and is incorporated herein by reference.
The information in this Item 7.01, including Exhibit 99.1, is furnished and 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 and shall not 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.
On February 19, 2023, the Company’s indirect subsidiaries, Finance of America Holdings LLC, a Delaware limited liability company (“Holdings”), and FAM (together with Holdings, the “Seller”) entered into an Asset Purchase Agreement (the “Agreement”) with the Buyer for the sale of certain operational assets of FAM, operating as FACO (the “FACO Transaction”). FACO originates, manages and services business purpose loans made to residential real estate investors.
Pursuant to the Agreement and subject to certain terms and conditions set forth in the Agreement, as consideration for the sale of certain operational assets of FACO, the Buyer will pay to Seller an aggregate purchase price over a three-year period, primarily calculated as an earnout payment based on the performance of the purchased assets, not to exceed $30,000,000.
The closing of the FACO Transaction is subject to the satisfaction or waiver by the applicable party of certain customary conditions. The Agreement contains certain customary termination rights for Seller and Buyer, including the right of either Seller or Buyer to terminate the Agreement on June 1, 2023 if the transactions contemplated thereby have not yet closed. The transaction is expected to close in the first quarter of 2023.
This transaction does not include FACO’s financial assets as of closing comprised of loans and securitization assets, which will continue to be sold or otherwise paid in full or liquidated in the ordinary course of business. Following the closing of the FACO Transaction, FAM will no longer operate in the business of originating business purpose loans to residential real estate investors. Upon closing of the FACO Transaction, the Company will no longer have a reportable Commercial Originations segment.
