Two Harbors Investment Corp. and CYS Investments, Inc. Announce Closing of Merger
July 31 2018 - 1:00PM
Business Wire
Two Harbors Investment Corp. (NYSE: TWO) (“Two Harbors”) and CYS
Investments, Inc. (NYSE: CYS) (“CYS”) today announced the closing
of the previously announced merger between Two Harbors and CYS.
Summary
- Upon the closing of the merger, each
share of CYS common stock was converted into the right to receive
0.4680 newly issued shares of Two Harbors common stock as well as
cash consideration of $0.0965 per share. Based on the number of
shares of CYS common stock outstanding as of the closing date,
approximately 72.7 million shares of Two Harbors common stock and
$15 million in cash consideration will be issued to CYS common
stockholders in connection with the merger.
- No fractional shares of Two Harbors
common stock will be issued in connection with the merger. Instead,
CYS common stockholders will receive cash in lieu of any fractional
shares.
- Shares of CYS common stock will
continue to trade on the New York Stock Exchange (“NYSE”)
throughout the day on July 31, 2018. Trading in shares of CYS
common stock will cease after market close on July 31, 2018 and
shares of CYS common stock will be converted into the right to
receive Two Harbors common stock and the cash consideration prior
to market open on August 1, 2018.
- The newly issued shares of Two Harbors
common stock will begin trading on the NYSE under the ticker symbol
“TWO” on August 1, 2018.
- Registered holders of CYS common stock
will have their shares of Two Harbors common stock posted to new
accounts at Equiniti Shareowner Services, the transfer agent for
Two Harbors. Beneficial holders of CYS common stock will have their
shares of Two Harbors common stock posted to their individual
accounts at their broker or financial institution, in accordance
with the policies and procedures of such broker or financial
institution.
Preferred Stock
- Upon the closing of the merger, each
share of CYS 7.75% Series A Cumulative Redeemable Preferred Stock
was converted into the right to receive one share of newly
classified Two Harbors’ 7.75% Series D Cumulative Redeemable
Preferred Stock, and each share of CYS 7.50% Series B Cumulative
Redeemable Preferred Stock was converted into the right to receive
one share of newly classified Two Harbors’ 7.50% Series E
Cumulative Redeemable Preferred Stock.
- The newly issued shares of Two Harbors
preferred stock will begin trading on the NYSE under the ticker
symbols “TWO PRD” and “TWO PRE” on August 1, 2018.
Leadership of the Combined Company
As previously announced, the combined company will continue to
be led by the executive management team of Two Harbors. In
addition, pursuant to the previously announced Agreement and Plan
of Merger, dated as of April 25, 2018, the size of the Two Harbors’
Board of Directors was increased from nine to eleven members upon
the closing of the merger, and Karen Hammond and James A. Stern,
two independent directors from CYS, were appointed to the Two
Harbors’ Board of Directors.
Advisors
JMP Securities LLC acted as financial advisor and Sidley Austin
LLP acted as legal advisor to Two Harbors. Barclays Capital Inc.
and Credit Suisse Securities (USA) LLC acted as financial advisors
and Vinson & Elkins LLP acted as legal advisor to CYS.
About Two Harbors Investment Corp.
Two Harbors Investment Corp., a Maryland corporation, is a real
estate investment trust that invests in residential mortgage-backed
securities, mortgage servicing rights and other financial assets.
Two Harbors is headquartered in New York, New York, and is
externally managed and advised by PRCM Advisers LLC, a wholly owned
subsidiary of Pine River Capital Management L.P. Additional
information is available at www.twoharborsinvestment.com.
About CYS Investments, Inc.
CYS Investments, Inc., a Maryland corporation, is a specialty
finance company that invests on a leveraged basis primarily in
residential mortgage pass-through certificates for which the
principal and interest payments are guaranteed by Fannie Mae,
Freddie Mac or Ginnie Mae. CYS refers to these securities as Agency
RMBS. CYS has elected to be taxed as a real estate investment trust
for federal income tax purposes.
Forward-Looking Statements
This press release may contain “forward-looking statements”.
Such statements are subject to numerous assumptions, risks, and
uncertainties. Statements that do not describe historical or
current facts, including statements about beliefs and expectations,
are forward-looking statements. The forward-looking statements are
intended to be subject to the safe harbor provided by
Section 27A of the Securities Act of 1933, as amended (the
“Securities Act”), and Section 21E of the Securities Exchange
Act of 1934, and the Private Securities Litigation Reform Act of
1995. All statements, other than statements of historical
fact, included in this communication that address activities,
events or developments that Two Harbors or CYS expects, believes or
anticipates will or may occur in the future are forward-looking
statements. Words such as “project,” “predict,”
“believe,” “expect,” “anticipate,” “potential,” “create,”
“estimate,” “plan,” “continue,” “intend,” “could,” “foresee,”
“should,” “may,” “will,” “guidance,” “look,” “outlook,” “goal,”
“future,” “assume,” “forecast,” “build,” “focus,” “work,” or the
negative of such terms or other variations thereof and words and
terms of similar substance used in connection with any discussion
of future plans, actions, or events identify forward-looking
statements. However, the absence of these words does not mean that
the statements are not forward-looking. These forward-looking
statements are not guarantees of future performance and involve
certain risks, uncertainties and assumptions that are difficult to
predict. Two Harbors’ and CYS’s ability to predict results or the
actual effect of future events, actions, plans or strategies is
inherently uncertain. Although Two Harbors and CYS believe the
expectations reflected in any forward-looking statements are based
on reasonable assumptions, the companies can give no assurance that
our expectations will be attained and therefore, actual outcomes
and results may differ materially from what is expressed or
forecasted in such forward-looking statements.
There are a number of risks and uncertainties that could cause
actual results to differ materially from the forward-looking
statements included in this communication, including those related
to the merger of Two Harbors and CYS. All such factors are
difficult to predict and are beyond the control of Two Harbors and
CYS, including those detailed in Two Harbors’ annual reports on
Form 10-K, quarterly reports on Form 10-Q and
periodic reports on Form 8-K that are available on Two
Harbors’ website at http://www.twoharborsinvestment.com and on the
SEC’s website at http://www.sec.gov,
those detailed in CYS’s annual reports on
Form 10-K, quarterly reports on Form 10-Q and
periodic reports on Form 8-K that are available on its
website at http://www.cysinv.com and
on the SEC’s website at http://www.sec.gov, and those detailed in
the section entitled “Risk Factors” in the joint proxy
statement/prospectus relating to the merger filed with the SEC on
June 25, 2018.
Each of the forward-looking statements of Two Harbors or CYS are
based on assumptions that Two Harbors or CYS, as applicable,
believes to be reasonable but that may not prove to be accurate.
Any forward-looking statement speaks only as of the date on which
such statement is made, and neither Two Harbors nor CYS undertakes
any obligation to correct or update any forward-looking statement,
whether as a result of new information, future events or otherwise,
except as required by applicable law. Readers are cautioned not to
place undue reliance on these forward-looking statements that speak
only as of the date hereof.
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version on businesswire.com: https://www.businesswire.com/news/home/20180731005787/en/
Two Harbors Investment Corp.Margaret Field, 212-364-3663Investor
Relationsmargaret.field@twoharborsinvestment.com
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