Radian Divests Clayton EuroRisk To Focus On Core Service
Zacks Investment Research | Nov 22, 2017 09:14PM ET
Radian Group Inc. (NYSE:RDN) divested its Clayton EuroRisk to a global investment firm. The divestiture is in sync with the company’s strategy to intensify its focus on core service.
Clayton EuroRisk is a provider of outsourced mortgage services in Europe. Henceforth, the company will not provide products and services for its Mortgage and Real Estate Services business in Europe. Radian Group intends to position its Service segment for continued profitability. EBITDA margin for the Services segment is expected in the 10-15% range over time.
Radian Group is restructuring business by increasing its focus on core business and services with higher-growth potential and ensuring more predictable and recurring fee-based revenues. Restructuring cost is estimated to be $20 million, of which, $12 million was recognized in the third quarter itself.
The company remains firmly focused on improving its mortgage insurance portfolio, the main catalyst of long-term earnings growth. It remains committed toward leveraging its core expertise in credit risk management, which will lead to more business written and strengthen the Mortgage Insurance franchise.
Radian Group carries a Zacks Rank #2 (Buy). Shares of Radian Group have rallied 15.6% year to date, outperforming the Zacks Investment Research
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