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SEC Filings

AGNC INVESTMENT CORP. filed this Form 10-Q on 08/05/2016
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Note 10. Subsequent Events
Acquisition of American Capital Mortgage Management, LLC
On July 1, 2016, we completed our acquisition of all of the outstanding membership interests of ACMM from ACAM, a wholly owned portfolio company of ACAS, for a purchase price of $562 million in cash. ACMM is the parent company of our Manager and the manager of MTGE. Following the closing of the acquisition, we became internally managed and are no longer affiliated with ACAS. We believe internalizing our management function will result in lower operating costs as well as management fee income from MTGE.
We will account for our acquisition of ACMM as a business combination using the acquisition method of accounting in accordance with applicable U.S. GAAP, whereby the total purchase price will be allocated to tangible and intangible assets acquired and liabilities assumed based on their respective fair values as of the acquisition date. Goodwill is calculated as the excess of the consideration transferred over the net assets recognized and represents the estimated future economic benefits arising from other assets acquired that could not be individually identified and separately recognized. The principal assets of ACMM at the acquisition date were our management agreement, the MTGE management agreement, an assembled workforce, cash of $7 million, certain non-compete agreements with executive officers and other miscellaneous assets. ACMM did not have any significant liabilities as of the acquisition date.
We are still in the process of completing our purchase price allocation and other items. We do not expect to recognize a gain or loss associated with the effective settlement of our pre-existing management agreement with our Manager on the acquisition date, and we expect that the substantial majority of the acquisition price will be recognized as goodwill attributable to intangible assets that do not qualify for separate recognition, largely consisting of our management agreement and assembled workforce. Goodwill is expected to be deductible for income tax purposes over a 15 year amortization period.
We recognized $9 million of transaction related costs that were expensed during the three and six months ended June 30, 2016. These costs are included in general, administrative and other expenses in our consolidated statements of comprehensive income.
On July 14, 2016, our Board of Directors declared a monthly dividend of $0.20 per common share, which will be paid on August 8, 2016, to common stockholders of record as of July 29, 2016. On July 27, 2016, our Board of Directors declared a monthly dividend of $0.18 per common share, which will be paid on September 9, 2016, to common stockholders of record as of August 31, 2016.


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