Tree.com, Charlotte, N.C., has modified the agreement with Discover Financial Services regarding the latter's purchase of Home Loan Center, which does business as LendingTree Loans.
The key term to the agreement is it accelerates part of the deferred money Tree.com was to get after the sale closed.
Under the amended agreement, Tree.com will get $3 million on March 7, whether or not the transaction—which has been delayed from its original closing date of on or before Oct. 9, 2011—has closed. Another $7 million is due at closing and $10 million on the first anniversary.
Original terms had approximately $36 million payable at closing and $10 million due on each the first and second anniversary.
To date, Discover has exercised four extensions of the closing date, paying a total of $5 million for this right.
The new end date for the transaction is March 7, with extensions possible until to July 6. Payments to exercise these extensions will count against the purchase price.
Another term of the amended deal allows for Home Loan Center to offer an expanded loan product menu.
Tree.com chairman and chief executive Doug Lebda said that while his company is looking forward to transitioning to a marketing company, "the success of our marketing initiatives and the historically low interest rate environment has enabled LendingTree Loans to generate substantial additional profit and cash flow, which accrue to our benefit."
