DALLAS - Denver-based Newman & Associates Inc., a privately held firm that was the eighth-largest underwriter of municipal housing bonds last year, has agreed to be bought by GMAC Commercial Mortgage Corp.
The move is intended to improve Newman's access to capital, allowing it to handle larger deals and continue its growth, the firm said in a statement yesterday.
"They really don't want us to change us a great deal," Newman president Scot Barker said yesterday. "They just want us to get better."
Financial terms of the deal were not disclosed, but officials said Newman will continue to function as an independent subsidiary of Horsham, Pa.-based GMAC Commercial. The deal is expected to close later this month, subject to regulatory approvals.
While a mortgage company buying a broker-dealer may sound unusual, Barker said yesterday his firm's expertise in structuring bond sales for housing authorities would "dovetail" with GMAC Commercial's property management and acquisition expertise.
Barker said the expanded capital base available through GMAC would make growth easier for the firm. Newman plans to expand its network of offices, mainly concentrated in the West, into the Eastern half of the country and to increase its handling of single-family issues, he said. GMAC Commercial also is acquiring Newman Mortgage Acceptance Corp., a mortgage banking subsidiary.
Newman handles tax-exempt and taxable bond deals and raises financing through both public bond sales and private placements.
GMAC Commercial, formed in 1994, has grown to assets of $45 billion from $5 billion at its creation. Some market participants speculated that the move would give GMAC Commercial a vehicle to securitize some of its assets. The company said bond financing of real estate projects was a natural move.
GMAC, a unit of General Motors Corp.'s financing arm, bills itself as "America's leading one-stop financial resource in the commercial mortgage banking industry."
Scott Rombach, a spokesman for GMAC Commercial, said a primary goal of the acquisition would be to get GMAC Commercial's 42-office network to use and expand its ability to work on deals for housing agencies.
"This gives us the ability to expand into areas where previously we were not so heavy," said Rombach.
Market participants in Denver said Newman has been shopping the firm for several months in an attempt to give some of its partners access to their equity prior to retirement. The firm chose GMAC Commercial after it rejected at least one other potential suitor.
According to Securities Data Co., Newman ran the books on approximately 55 deals worth $483 billion in 1996. In 1997 it did 75 deals worth $670 billion. So far this year, the firm has been senior manager on 41 deals for $275.3 million.
With more than 60 employees, Newman has offices in San Diego, Los Angeles, Washington, D.C., and New Orleans.
Lisa Sanders and Mark T. Kuiper contributed to this article.
