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August 04, 2017  

ORIX Strikes Deal to Buy Healthcare Lender

ORIX USA has agreed to buy Lancaster Pollard, a senior-housing and healthcare lender, from Stone Point Capital for slightly more than $300 million.

The transaction, which is subject to regulatory approval, will give ORIX control of two of the biggest originators of FHA and Ginnie Mae loans. The Dallas investment and asset-management shop already owns Red Capital, which ranked third in that sector last year, with $1.5 billion of originations, according to the Mortgage Bankers Association. Lancaster ranked seventh, with $976 million of loans. Their combined total would have ranked first, exceeding Berkadia’s $2.1 billion FHA/Ginnie volume.

Red Capital and Lancaster, both based in Columbus, Ohio, also have large servicing portfolios of FHA/Ginnie loans. Red Capital ranked second at the end of last year, with $9.4 billion of servicing contracts, and Lancaster ranked eighth, at $5.2 billion. On a pro-forma basis, the merged portfolio would have been the largest, ahead of the $14.4 billion of contracts held by PNC subsidiary unit Midland Loan Services. Red Capital is also an active originator and servicer of Fannie Mae loans.

Red Capital and Lancaster initially will continue to operate separately, although there’s speculation that the two operations could be merged eventually. Beekman Advisors is advising ORIX on the acquisition.

Stone Point, a private equity shop in Greenwich, Conn., acquired Lancaster in 2013. It put the company up for sale last year via Credit Suisse.

Red Capital is a division of ORIX, which operates across multiple sectors, including real estate. ORIX bought an 88% stake in Red Capital in 2010 from PNC and last year acquired the remaining 12% interest. ORIX last year also acquired Boston Financial Investment Management, a syndicator of tax credits on low-income housing.