Shares of Walter Investment Management (WAC) fell sharply Monday upon the company’s announcement that is buying Green Tree for $1.07 billion.

Located in St. Paul, Minnesota, Green Tree is a fee-based business services company that helps manage credit-sensitive consumer loans.

“We believe that with the acquisition of Green Tree, Walter Investment will be uniquely positioned to capture a significant share of the growing specialty mortgage services sector,” said Mark J. O'Brien, Walter’s chief executive.

Under the terms of the deal, Walter will issue about 1.8 million shares of common stock to the seller, assume some $20 million of existing Green Tree debt, and issue $765 million of new debt. The transaction is slated to close early in the third-quarter.

Following the deal’s close, which is subject to regulatory approvals, third-party consents and customary closing conditions, Walter will no longer qualify as a real estate investment trust. The investment company’s board has unanimously approved the transaction.

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