Cooper Group’s Acquisition of IBM’s Mortgage Servicing Business


Cravath is representing IBM in connection with the transaction.

Cooper Group has entered into a definitive agreement with IBM to acquire IBM’s mortgage servicing business.

IBM acquired the Seterus mortgage servicing business in the wake of the 2008 financial crisis to help a client manage a broad mortgage portfolio, including high risk loans. IBM was successful in the mortgage servicing work, and the portfolio is now much more stable. The time is now right to divest this business to a mortgage servicing specialist, whose domain-specific expertise and scale can further advance this business.

IBM runs the world’s most critical business processes, bringing together innovative technologies and industry expertise through an integrated model, to help clients transform their businesses. Over the last few years, IBM has been increasing investments and skills in key areas such as AI and analytics, hybrid cloud, security and blockchain to facilitate client transformations.

At the same time, the company constantly prioritizes investments, considering factors such as market attractiveness, differentiation, and importance to IBM’s integrated model. This ensures the company is addressing evolving client needs, while driving shareholder value.

The mortgage servicing business is not core to IBM’s portfolio, and Seterus, an IBM subsidiary, has been run as a stand-alone business. This definitive agreement signed between IBM and Mr. Cooper is another example of IBM’s commitment to disciplined portfolio management.

The Cravath team is led by partners George F. Schoen (Picture) and Keith Hallam and includes associates Saarah Woodby, Joshua Ayal, Quinn Wetherall and Eli D. Heller on M&A matters; partner Jennifer S. Conway and associates Aaron J. Feuer and Sally Ye on executive compensation and benefits matters; partner Andrew W. Needham and associates Cecily Xi and Rory M. Minnis on tax matters; and senior attorney Joyce Law and practice area attorney Laurel R. Berkowitz on real estate matters.

Involved fees earner: Joshua Ayal – Cravath Swaine & Moore; Laurel Berkowitz – Cravath Swaine & Moore; Jennifer Conway – Cravath Swaine & Moore; Aaron Feuer – Cravath Swaine & Moore; Keith Hallam – Cravath Swaine & Moore; Eli Heller – Cravath Swaine & Moore; Joyce Law – Cravath Swaine & Moore; Rory Minnis – Cravath Swaine & Moore; Andrew Needham – Cravath Swaine & Moore; George Schoen – Cravath Swaine & Moore; Quinn Wetherall – Cravath Swaine & Moore; Saarah Woodby – Cravath Swaine & Moore; Cecily Xi – Cravath Swaine & Moore; Sally Ye – Cravath Swaine & Moore;

Law Firms: Cravath Swaine & Moore;

Clients: IBM;

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Author: Ambrogio Visconti