DEFM14C: Guild Holdings to Go Private in $20/Share Cash Deal

Guild Holdings Company will be acquired by Gulf MSR HoldCo, LLC for $20.00 per share in cash, with majority shareholder approval already secured via written consent.

Summary

• Guild Holdings Company is being acquired by Gulf MSR HoldCo, LLC (Parent), a wholly-owned subsidiary of a fund managed by Bayview Asset Management LLC.
• The merger consideration is $20.00 in cash per share for both Class A and Class B common stock, without interest and less applicable withholding taxes.
• The Company's Board of Directors unanimously determined the merger and related transactions to be advisable and fair to and in the best interests of the Company and its stockholders, and approved the Merger Agreement.
• Stockholder approval was obtained on June 17, 2025, immediately following the execution of the Merger Agreement, through a written consent from McCarthy Capital Mortgage Investors, LLC (MCMI), representing approximately 94.8% of the total voting power.
• Certain current and former directors and officers, holding an additional 2.9% of total voting power, also delivered written consents, meaning no further stockholder action or meeting is required.
• A special cash dividend of up to $0.25 per share in 2025 is permitted, and if the merger is not consummated in 2025, quarterly cash dividends of up to $0.25 per share through consummation in 2026 are also permitted, without adjusting the $20.00 per share merger consideration.
• The merger is currently expected to be completed in the fourth quarter of calendar year 2025.
• Morgan Stanley & Co. LLC rendered an opinion to the Board on June 17, 2025, confirming that the $20.00 cash consideration per share of Class A Common Stock was fair from a financial point of view to such holders (other than Parent and its affiliates).

Sentiment

Score: 8

Explanation: The all-cash merger offers a substantial premium (56% over unaffected price, 27% over tangible book value) and immediate liquidity to shareholders, which was unanimously approved by the Board and deemed financially fair by Morgan Stanley. The transaction is fully financed, significantly de-risking the deal's completion. While shareholders lose future equity upside, the current offer is compelling given market conditions and previous lower offers.

Positives

• Stockholders will receive an attractive value of $20.00 per share, representing an approximate 56% premium over the Company's unaffected closing common stock price of $12.84 on May 23, 2025.
• The merger consideration is all cash, providing stockholders with immediate certainty of value and liquidity, while eliminating long-term business and execution risk.
• The offer represents a premium of approximately 27% to the Company's tangible book value of $15.77 as of March 31, 2025.
• The Board believes the per-share merger consideration compares favorably to the potential long-term value of the Company if it were to remain a stand-alone entity, considering associated risks.
• The Board is permitted to authorize a special cash dividend of up to $0.25 per share in 2025 and, if the merger is not completed in 2025, quarterly cash dividends of up to $0.25 per share through consummation in 2026, without reducing the $20.00 per share merger consideration.
• The transaction is not contingent on financing, with an equity commitment letter from the Equity Investor for up to approximately $1,283,000,000.
• Parent is required to pay a reverse termination fee of $72,900,000 under certain circumstances, and the Company is entitled to specific performance to enforce the merger.
• Early termination of the Hart-Scott-Rodino Antitrust Improvements Act (HSR Act) waiting period was granted effective August 7, 2025, indicating progress on regulatory approvals.

Negatives

• Stockholders will have no ongoing equity participation in the Company following the merger, ceasing to participate in future earnings, dividends, or growth, and will not benefit from any increases in the Company's value post-merger.
• The Company is prohibited from soliciting alternative acquisition proposals after the MCMI Written Consent was delivered, limiting opportunities for a potentially higher offer.
• The Company may be required to pay Parent a termination fee of $38,000,000 under certain conditions if the merger agreement is terminated.
• The transaction involves anticipated merger-related costs.
• There is a risk that all conditions to the merger, including obtaining remaining regulatory approvals, may not be satisfied on a timely basis or at all, potentially delaying or preventing consummation.
• Regulatory approvals may impose unacceptable conditions that could adversely affect the Company's business.
• The merger could divert management focus and resources from other strategic opportunities and operational matters.
• Restrictions on the conduct of the Company's business during the period between the execution of the merger agreement and consummation could limit its ability to pursue new business opportunities.

Risks

• The expected timing and likelihood of completion of the pending merger transaction are subject to uncertainties.
• The timing, receipt, and terms and conditions of any required governmental approvals of the pending transaction may impose materially burdensome or adverse regulatory conditions, delay the transaction, or cause the parties to abandon the transaction.
• Potential legal proceedings may be instituted against the Company following the announcement of the transaction.
• The occurrence of any event, change, or other circumstances could give rise to the termination of the merger agreement.
• The risk that the parties may not be able to satisfy the conditions to the pending transaction in a timely manner or at all.
• Risks related to disruption of management time from ongoing business operations due to the proposed transaction.
• The risk that the proposed transaction and its announcement could have an adverse effect on the ability of the Company to retain and hire key personnel and maintain relationships with its customers, agents, or business counterparties, and on its operating results and businesses generally.
• The risk that any announcements relating to the pending Merger could have adverse effects on the market price of the Company Common Stock.
• Significant changes to the size, structure, powers, and operations of the federal government and uncertainties regarding the potential for future changes could cause disruptions to the regulatory environment in which the Company operates.
• The judicially determined fair value under Section 262 of the DGCL for appraisal rights could be greater than, equal to, or less than the $20.00 per share merger consideration.

Future Outlook

The merger is expected to be completed in the fourth quarter of calendar year 2025. Following consummation, Guild Holdings Company will become a direct, wholly-owned subsidiary of Parent, and its Class A Common Stock will be delisted from the NYSE and deregistered under the Exchange Act. Management projections for fiscal years 2025 and 2026 anticipate growth in mortgage originations, net revenue, and adjusted EBITDA and net income, suggesting a positive operational trajectory prior to the acquisition.

Management Comments

• The Board determined that the Merger Agreement and the transactions contemplated thereby, including the Merger, are advisable and fair to and in the best interests of the Company and its stockholders.
• The Board approved and adopted the Merger Agreement and recommended its adoption and approval to the Company's stockholders by written consent in lieu of a meeting.
• Mr. Duffy informed Mr. Ertel that any price equal to the Company's tangible book value was not acceptable and that any per share price proposed would have to be substantially higher for the Board to consider a potential business combination transaction.
• Mr. Ertel stated that Bayview was not willing to consider any increase to the $20.00 per share price, which Bayview believed reflected a compelling premium to the Company's trading share price and long-term value.

Industry Context

The announcement occurs within a retail mortgage industry facing economic and financial market conditions, interest rate fluctuations, and evolving regulatory environments. The industry is also experiencing increased operating costs due to regulatory and compliance mandates and heightened competition from banks, non-bank financial services, and financial technology firms. The acquisition by Bayview Asset Management, a firm with a mortgage servicing affiliate, Lakeview Loan Servicing, LLC, suggests a strategic move to consolidate or leverage complementary operations, potentially allowing Guild Holdings to navigate these challenges as a private entity.

Comparison to Industry Standards

• Morgan Stanley's comparable company analysis indicated that the Company's P/TBV of 0.8x (based on the unaffected share price) was below the median of 1.1x for selected comparable companies (loanDepot, PennyMac Financial Services, Rithm Capital, Rocket Companies, UWM Holdings), excluding outliers.
• The Company's P/2025E Earnings of 7.4x (based on management projections) was close to the median of 7.3x for comparable companies.
• The Company's P/2026E Earnings of 6.5x (based on management projections) was below the median of 7.3x for comparable companies.
• The $20.00 merger consideration implies a P/TBV of 1.27x ($20.00 / $15.77), which is within Morgan Stanley's selected range of 0.8x-1.3x (excluding outliers) and above the Company's standalone 0.8x.
• The $20.00 merger consideration implies a P/2025E Earnings of 9.66x (based on management projections) and 11.49x (based on Street Consensus), which is above the comparable company median of 7.3x and the selected range of 6.3x-8.3x.
• The $20.00 merger consideration implies a P/2026E Earnings of 7.25x (based on management projections) and 10.10x (based on Street Consensus), which is close to the comparable company median of 7.3x and within the selected range of 6.3x-8.3x for Management Projections, but above for Street Consensus.
• Morgan Stanley's precedent transactions analysis, which included six mortgage originations sector transactions since 2018, used P/E ratios ranging from 4.7x to 8.7x and P/TBV ratios from 0.5x to 1.4x. The $20.00 merger consideration falls within these implied ranges.

Management Changes

Corporate Governance

Legal Proceedings

• As of the filing of this Information Statement, the Company is not aware of any complaints filed or litigation pending related to the Merger.
• The Board considered the potential for legal claims challenging the merger as a risk factor in its evaluation of the transaction.

Related Party Transactions

• McCarthy Capital Mortgage Investors, LLC (MCMI), which beneficially owns 100% of the Company's Class B Common Stock and approximately 94.8% of the total voting power, delivered a written consent adopting the Merger Agreement. Patrick J. Duffy, Chairperson of the Board, is the Managing Partner and President of M-One Capital Partners, LLC, which exercises voting and dispositive control over MCMI's shares.
• Certain current and former directors and officers of the Company, holding an aggregate of 12,228,451 shares of Class A Common Stock (approximately 2.9% of the total voting power), also delivered written consents adopting the Merger Agreement.
• The Board explicitly noted that MCMI would receive the same consideration as all minority stockholders of the Company and would not receive any benefit unique to MCMI that would not also be received by the Company's minority stockholders.
• The filing states that, other than as set forth in Company SEC Documents and Company Benefit Plans, there are no other transactions, agreements, or understandings between the Company or its subsidiaries and any current or former director, executive officer, or 5% beneficial owner (or their family/affiliates) of the type required to be reported under Item 404 of Regulation S-K.

Stakeholder Impact

• Shareholders: Will receive a significant cash premium and immediate liquidity for their shares, but will lose any future equity participation, dividends, or growth potential in the Company. Non-consenting shareholders have appraisal rights.
• Employees: Key executive officers (CEO, CFO, COO) are expected to continue in their roles with new employment agreements. Continuing employees will receive comparable base salary, target long-term cash incentives, and other benefits for one year post-merger. Retention bonuses are a possibility for certain management members.
• Directors and Officers: Current directors are expected to resign. Directors and officers will benefit from accelerated vesting and cash-out of their equity awards, as well as continued indemnification and directors and officers liability insurance for six years post-merger.
• Customers, Suppliers, and Business Counterparties: The announcement and transition could potentially have an adverse effect on existing relationships, though the Company is obligated to use reasonable best efforts to preserve these relationships.
• Regulatory Authorities: The merger is subject to various governmental and regulatory clearance procedures, including HSR Act, Fannie Mae, Ginnie Mae, and state governmental entities, which could impose conditions or delays.

Next Steps

• The Company will prepare and file a definitive Information Statement (Schedule 14C) with the SEC.
• The Information Statement will be mailed to stockholders on or about September 22, 2025.
• Stockholders (other than the Supporting Stockholders) have until October 12, 2025, to submit a written demand for appraisal rights under Delaware law.
• Actions approved by the written consent of the stockholders are expected to be taken on or after October 12, 2025.
• The merger is expected to be completed in the fourth quarter of calendar year 2025.
• Upon completion of the merger, the Company's Class A Common Stock will be delisted from the NYSE and deregistered under the Exchange Act.
• The surviving corporation will continue to indemnify and provide directors and officers liability insurance for six years after the Effective Time.
• Parent will ensure that continuing employees receive comparable base salary, target long-term cash incentive opportunities, and other employee benefits for one year following the Effective Time.

Key Dates

Recommendation

The all-cash offer of $20.00 per share represents a substantial premium of 56% over the unaffected share price and 27% over tangible book value. The transaction is fully financed, and the majority shareholder has already provided consent, significantly de-risking the deal's completion. While the current market price is close to the offer, the certainty of a cash payout at a premium, coupled with the potential for a special dividend, makes it an attractive short-term arbitrage opportunity for investors willing to hold until closing. The Board and financial advisors have deemed the offer fair, and the regulatory approvals are progressing.

Keywords

Guild Holdings Company, GHLD, Merger, Acquisition, Bayview Asset Management, Mortgage Lender, Financial Services, Go-Private, Stockholder Approval, Appraisal Rights, Special Dividend, Mortgage Origination, Mortgage Servicing