Velocity Financial to acquire Toorak Capital platform in deal valued at $3.2 billion
WESTLAKE VILLAGE, Aug 27. Velocity Financial, Inc. (NYSE: VEL) disclosed a definitive agreement to acquire the operating platform of Toorak Capital LLC in a transaction estimated at approximately $3.2 billion, based on Toorak's consolidated balance sheet as of June 30, 2026. Toorak is a business-purpose lending and asset management platform majority owned by funds advised by affiliates of KKR.
Key takeaways
- Velocity Financial agreed to acquire the operating platform of Toorak Capital in an all-cash transaction valued at approximately $3.2 billion, based on Toorak's June 30, 2026 consolidated balance sheet.
- The acquisition includes Merchants Mortgage & Trust Corporation, Toorak's US direct origination business, and its lending operations in the US and United Kingdom, with Toorak employing about 280 people as of June 30, 2026.
- Separately, Toorak agreed to sell its existing business-purpose loan portfolio, carrying roughly $3 billion in unpaid principal balance, to a third-party investment firm that Velocity will manage the portfolio for after closing.
- Velocity said the deal would scale its origination platform by 76% and its servicing platform by 39%, and expects the transactions to be accretive to GAAP earnings in 2027.
- The transaction is expected to close in the fourth quarter of 2026, subject to customary conditions.
WESTLAKE VILLAGE, Aug 27. Velocity Financial, Inc. (NYSE: VEL) disclosed a definitive agreement to acquire the operating platform of Toorak Capital LLC in a transaction estimated at approximately $3.2 billion, based on Toorak's consolidated balance sheet as of June 30, 2026. Toorak is a business-purpose lending and asset management platform majority owned by funds advised by affiliates of KKR.
The acquisition is structured as a 100% cash purchase of Toorak's platform, including Merchants Mortgage & Trust Corporation, Toorak's direct origination business in the United States, and Toorak's lending operations across both the US and the United Kingdom. Toorak employed approximately 280 people as of June 30, 2026, including roughly 120 at Merchants.
Separately, Toorak entered into agreements with a third-party investment firm for the sale of its existing business-purpose loan portfolio. That portfolio carries approximately $3 billion in unpaid principal balance across whole loans and loans held in Toorak Mortgage Trust and TRK Trust securitizations. Velocity will manage the portfolio for the third-party buyer following closing and will enter agreements to sell future Toorak loan production to that firm and other counterparties, according to the release.
Velocity said the deal would scale its origination platform by 76% and its servicing platform by 39%. It also adds a direct retail origination channel through Merchants and extends Velocity's reach into the United Kingdom. The company expects the transactions to be accretive to GAAP earnings in 2027, the release shows.
Founded in 2016 with KKR backing, Toorak has funded more than $20 billion in cumulative volume across nearly 43,000 loans. Its lending products include residential transition loans, ground-up construction loans, and debt service coverage ratio loans secured by residential properties, offered in the United States and the United Kingdom.
Chris Farrar, Co-Founder and Chief Executive Officer of Velocity, said the acquisition reflects a commitment to scaling in segments with durable demand. John Beacham, Founder and CEO of Toorak, said the combination would allow the platform to operate at greater scale. Upon closing, Beacham is expected to become an Executive Vice President of Velocity Commercial Capital, LLC, with Toorak operating as a subsidiary of that entity and retaining its headquarters in Tampa, Florida.
The transaction is expected to close in the fourth quarter of 2026, subject to customary conditions. Barclays Capital Inc. advised Velocity; Piper Sandler & Co. advised Toorak and KKR.