Finance Of America Cos. Inc. will acquire assets of direct-to-consumer reverse mortgage lender American Advisors Group for a combination of cash and equity.

The transaction is expected to close in the first half of 2023. Finance Of America Cos. expects the deal to be accretive to both tangible book value and EPS.

Once the deal closes, Finance of America Reverse LLC, a subsidiary of Finance Of America Cos., will operate a separate direct-to-consumer retail channel under the American Advisors Group brand.

Finance of America Reverse will purchase a substantial majority of American Advisors Group's assets and certain of American Advisors Group's liabilities, including certain residential reverse mortgage loans, as well as the right to service certain mortgage loans originated pursuant to the Federal Housing Administration's Home Equity Conversion Mortgage program, among other things.

Finance of America Reverse will pay American Advisors Group $10 million in cash; Finance Of America Cos. will issue 1 share of its class B common stock to American Advisors Group.

Also, Finance of America Equity Capital LLC will issue up to 33,893,666 of its class A units to American Advisors Group. Of those units, 19,692,990 will be issued at the closing of the transaction, and the remainder will be issued upon the occurrence of certain events.

Finance Of America Cos. also entered into separate stock purchase agreements with certain investors that will see each of them purchase 10,869,566 shares of the company's class A common stock for an aggregate purchase price of $15 million.

The closing of the equity investments will happen on the date that the American Advisors Group transaction completes.

In support of the deal, existing shareholders of Finance Of America, including entities affiliated with founder and Chair Brian Libman, committed to invest an additional $30 million of capital into the company through a private placement of the company's common stock. The investment is conditioned upon customary closing conditions, including the closing of the American Advisors Group deal.