Annaly (NLY) Closes $1.5B Acquisition of Hatteras Financial

Per a news report by the Triad Business Journal, Annaly Capital Management, Inc. NLY, the New York-based mortgage real estate investment trust ("mREIT") has closed the previously announced acquisition of Winston Salem, NC–based mREIT, Hatteras Financial Corp. for $1.5 billion. This strategic deal is likely to benefit the shareholders of both the companies.

This merger deal inked in April, was expected to be closed by the end of third-quarter 2016. The deal is anticipated to raise the book value of Annaly and strengthen its position in the mREIT space (read more: Annaly Inks Deal to Acquire Hatteras Financial for $1.5B).

Notably, Annaly acquired Hatteras through an exchange offer and the former garnered over 70 million common shares of the latter. Per the terms of the deal, the shareholders of Hatteras received 1.5 shares of Annaly.

In fact, in June, the previously announced exchange offer for this deal was extended to Jul 11, in order to receive the remaining regulatory approvals which were essential for the completion of the deal (read more: Annaly Extends Exchange Offer for Acquiring Hatteras).

Hatteras commenced its operations in 2007 as an agency REIT and performed well even during the turbulent times of recession. Now, with Annaly acquiring Hatteras, shareholders of the latter are likely to benefit from a diversified portfolio base of the former. Further, the operating scale, capital alternatives and liquidity of the larger merged entity are expected to have a positive impact on investor sentiment.

Currently, Annaly carries a Zacks Rank #3 (Hold). Investors interested in the mREIT industry may consider stocks like American Capital Agency Corp. AGNC, Redwood Trust, Inc. RWT and Hannon Armstrong Sustainable Infrastructure Capital, Inc. HASI. While both American Capital Agency and Redwood Trust  sport a Zacks Rank #1 (Strong Buy), Hannon Armstrong Sustainable Infrastructure Capital has a Zacks Rank #2 (Buy).

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