GTCS Holdings, or Green Tree Credit Solutions, will be acquired by Walter Investment Management Corporation in a deal valued at $1 billion, the companies said Monday.

Green Tree, a St. Paul-based loan servicer, partners with credit-risk owners to help them maximize the performance of their loan portfolios. The company employs approximately 1,900 people and services a $37 billion loan portfolio consisting of over 745,000 loans, according to a news release.

Walter Investment is a Tampa, Florida-based mortgage servicer and mortgage portfolio owner specializing in less-than-prime and other credit-sensitive mortgage assets. As part of the agreement, the company will issue approximately 1.8 million shares of common stock to privately held Green Tree.

The company will also assume approximately $20 million of existing Green Tree debt and issue about $765 million of new debt, which will be financed by Credit Suisse and the Royal Bank of Scotland. As a result of the transaction, Walter will no longer be structured as a real estate investment trust.

“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,” Mark J. O'Brien, Walter Investment's chairman and CEO, said in a statement. “Green Tree has demonstrated its ability to capitalize on the cyclical and secular trends in the mortgage sector, which we believe offer great opportunities for significant revenue growth.”

Green Tree was once owned by an Indiana-based insurance company, Conseco, which paid $6.4 billion for the company in 1998. Loan losses at Green Tree helped push Conseco into a bankruptcy filing in 2002. Green Tree has since passed hands among multiple private equity firms.

Walter Investment has annual revenue of about $180 million and employs about 340 people.