Radian, MGIC Sell Portions of Sherman JV

Mortgage insurers Radian Guaranty and Mortgage Guaranty Insurance Corp. have sold portions of their interest in Sherman Financial Group LLC to an entity owned by Sherman's senior management.Sherman is a single-source provider of debt recovery systems for financial institutions and other businesses. Following the sales, Philadelphia-based Radian owns 21.8% of the outstanding equity in Sherman, Milwaukee-based MGIC owns 24.2%, and the remainder is controlled by Sherman management, the companies said. MGIC reported that it received a cash payment of $240.8 million in the sale and is entitled to a contingent payment if the management entity's after-tax return on the purchased interests exceeds 16% annually by Dec. 13, 2013. Radian reported that it received a cash payment of approximately $278 million and may also receive a contingent payment based on unspecified terms involving the future rate of return. Radian also reported an option agreement under which Sherman management may buy Radian's remaining interest any time in the next year. The mortgage insurers can be found on the Web at http://www.radian.biz and http://www.mgic.com, and Sherman can be found at http://www.shermfin.com.