Good morning. I'm Kelsey Duffey, Vice President of Investor Relations at Walker & Dunlop, and I would like to welcome you to our webcast this morning. Hosting the call today is Willy Walker, Walker & Dunlop Chairman and CEO. He's joined by Steve Theobald, Walker & Dunlop Chief Financial Officer, and Shawn Horwitz, Alliant CEO. Today's webcast is being recorded, and a replay will be available on the Investor Relations section of our website. At this time, all participants have been placed in a listen-only mode, and the floor will be open for your questions following the presentation. If you have dialed into the call and would like to ask a question at that time, please press star nine on your phone. If you're accessing the webcast on your computer, please click the raise hand icon on the bottom menu bar of the webcast screen.
Yesterday, we issued a press release and filed a Form 8-K with the SEC announcing that Walker & Dunlop has entered into a definitive agreement to acquire Alliant Capital and its affiliates. The release and filing are available in the Investor Relations section of our website, www.walkeranddunlop.com, along with a slide presentation covering today's acquisition overview. Please also note that we will reference the non-GAAP financial metric, adjusted EBITDA, during the course of this call. Please refer to the webcast presentation posted on our website for a reconciliation of this non-GAAP financial metric. Statements made on this call, which are not historical facts, may be deemed forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995.
Forward-looking statements describe our current expectations, and actual results may differ materially. Walker & Dunlop is under no obligation to update or alter our forward-looking statements, whether as a result of new information, future events, or otherwise, and we expressly disclaim any obligation to do so. More detailed information about risk factors can be found in our annual and quarterly reports filed with the SEC. I will now turn the call over to Willy.
Thank you, Kelsey, and good morning, everyone. And thank you for joining us to discuss the exciting announcement we made yesterday regarding our agreement to acquire Alliant Capital and its affiliates. First, I want to welcome Shawn Horwitz, CEO of Alliant, who is joining us on the call this morning, as well as welcome the entire Alliant team to Walker & Dunlop. After we announced the acquisition agreement yesterday afternoon, I had the pleasure of speaking with the Alliant team over Zoom, and it was wonderful to feel the shared sense of enthusiasm about what our two firms can do together and the growth opportunities ahead. As our press release yesterday outlined, Alliant is an alternative investment manager focused on the multifamily affordable housing sector.
Alliant is the sixth-largest syndicator of low-income housing tax credits in the United States and a scaled joint venture development partner for affordable properties and community preservation fund management. The addition of Alliant's people, assets, and capital formation capabilities immediately makes Walker & Dunlop a market leader in the affordable housing industry with expertise in lending, sales, development, and tax credit syndication. W&D already finances communities across the United States where people live, work, shop, and play, and the addition of Alliant gives us a dramatically larger role in financing, developing, managing, and selling affordable housing communities, which are so desperately needed as the cost of housing continues to escalate at breakneck speed. This is Walker & Dunlop's 14th acquisition since going public, and we are extremely proud of our track record of successfully acquiring and integrating partner companies.
And as with each of our previous acquisitions, it all starts with the people. We evaluated Alliant's culture and business approach, and after spending time with Shawn, it was clear that he and his team have not only built a fantastic business but have established a corporate culture and partnerships that are similar to W&D's. Upon closing, Shawn will continue in his role as CEO, and all other members of Alliant's executive leadership team have signed long-term employment agreements. Beyond Shawn and the other executives, Alliant contains over 120 talented professionals who will join Walker & Dunlop across the country. We look forward to welcoming them to the broader W&D team. At our Investor Day last December, we outlined our five-year growth strategy called the Drive to 25, with the underlying goal of doubling revenues to $2 billion by 2025.
The plan includes ambitious growth objectives in debt financing, property sales, servicing, and fund management. In addition, we established environmental, social, and governance goals that include financing $60 billion of affordable housing over the next five years. With the acquisition of Alliant, we make huge strides towards achieving the Drive to 25 by accelerating revenue growth, adding $14 billion of AUM that far exceeds the Drive to 25 goal of $10 billion, and establishing W&D as a powerhouse in the affordable lending space to meet our $60 billion affordable lending target. Investors can once again see W&D laying out an ambitious five-year, bold, highly audacious business plan, setting our team to achieve it and knocking it down piece by piece.
As the largest multifamily capital provider in the United States, Walker & Dunlop has a significant presence in the affordable housing space today, having lent over $17 billion on affordable housing properties over the past three years. But with Alliant, we now have an amazing opportunity to dramatically grow in this vital part of the market. Fannie, Freddie, and HUD, W&D's three largest capital partners, are extremely focused on affordable housing, and as more and more institutional owners enter the affordable space due to the evolving macroeconomic trends, the affordable market and W&D will see significant growth over the coming years. Inside Alliant's large portfolio of affordable housing assets, between 50 and 75 assets will be eligible to be sold, refinanced, or recapitalized each year.
This presents a wonderful opportunity for W&D's scaled debt financing and property sales platforms to capture deal flow and expand our client base to Alliant's JV partners. When Steve outlines the consideration being paid for Alliant and the expected financial benefits to W&D, none of these synergies are included in those numbers. In addition to giving us a leadership position in the affordable housing market, the acquisition of Alliant immediately achieves our Drive to 25 asset management goal of $10 billion. Alliant's $14 billion of assets under management, combined with Walker & Dunlop Investment Partners' $2 billion, will give us total AUM of $16 billion and fantastic momentum in building a scaled alternative asset management business. And along with W&D's $112 billion servicing portfolio, we'll generate consistent long-term high-margin cash revenue streams that will drive W&D's EBITDA even higher.
Finally, as we integrate the Alliant team and businesses into Walker & Dunlop, we will apply our people, brand, and technology to make Alliant even better than it is today. We have seen what W&D's technology and marketing have done for our revenue growth over the past few years, and we will work diligently and tirelessly with the Alliant team to ensure they can leverage off of all we have built. I will now turn the call over to Steve to talk to you more about Alliant and the opportunities ahead, and then Steve will come on to talk through, oh, I'm going to turn it to Shawn first, excuse me, and then Steve will come through to talk about the financials of the transaction. Shawn?
Thank you, Willy, and good morning, everyone. I'm pleased to be here today to share a bit about Alliant and the strategic combination of our company with Walker & Dunlop. We are very excited to integrate our operations with Walker & Dunlop and see significant opportunity for continued growth over time as we apply Walker & Dunlop's market-leading brand and technology to our businesses. Alliant Capital was founded in 1997 to assist in America's critical need for affordable housing and has grown to become a top 10 tax credit syndicator in the United States. Our vertically integrated asset management model supports the development and financing of multifamily affordable properties through three main business areas. The first and largest piece of our business is our low-income housing tax credit, or LIHTC syndication platform, which provides financing and equity for the development of affordable housing properties throughout the country.
Through the second area of our business, ADC Communities, we establish joint venture relationships with multifamily developers to develop and syndicate affordable LIHTC properties, and finally, the third piece of our business, Alliant Strategic Investments, we make direct investments in affordable housing assets with a goal of preserving much-needed affordable housing in communities throughout the country. Since our inception, we have raised over $8 billion in equity, and we have invested in over $17 billion of asset value. Our investments have touched over 1,000 properties and have served over 400,000 families, making a meaningful impact on the supply and availability of affordable housing in America.
Our expertise in the housing tax credit syndication space is unmatched in the industry, and our scale in the affordable housing market has allowed us to develop strong relationships across the country, increasing our ability to serve developers, owners, and operators of this much-needed asset class. The strategic combination of our long-standing affordable housing-focused business model with Walker & Dunlop's market-leading multifamily lending and property sales presence will create significant opportunities for the expansion of all three of Alliant's businesses. The tax credit syndication market saw a total volume of $18 billion in 2020, and Alliant had roughly 3.4% of the market of a highly fragmented market. Investor demand for housing credits continues to grow, and with the right investments in our platform, we see a huge opportunity to grow our syndication volume and gain market share.
We were the sixth-largest tax credit syndicator in 2021 and have a real opportunity to move up in the rankings. We will be in a unique position with Alliant's housing tax credit syndication capabilities, paired with the scaled mortgage banking capabilities of Walker & Dunlop, to grow our platform faster than the competition set. We're extremely focused on scaling our joint venture development business by expanding our partnerships, which will create additional future debt financing and sales opportunities for the Walker & Dunlop core business. Our team is excited to begin leveraging Walker & Dunlop's brand and reputation in the industry, along with its investments in technology, to better serve our investors and partners and grow the business over the coming years.
After initial conversations with Walker & Dunlop, we quickly learned that our two firms' cultures aligned perfectly in terms of our entrepreneurial spirit, customer-centric approach, driven employees, and a desire to make a lasting impact on the communities through the support of the affordable housing market. We are thrilled to be joining Walker & Dunlop and what the growth opportunities for our business as part of such an incredible team. Thank you. I look forward to speaking with many of you in the future. I will now hand the call over to Steve.
Thank you, Shawn. It's great to have you with us this morning, and I would also like to extend a welcome to all of your employees at Alliant. We are incredibly excited for you and your team to become part of the Walker & Dunlop family. Under the terms of our acquisition agreement, we will acquire Alliant at a total enterprise value of $696 million. The purchase consideration will be a combination of cash, assumption of certain of Alliant's debt, $90 million of W&D common stock, and a potential for another $100 million tied to an earnout over the next four years. The cash portion of the purchase price is approximately $351 million and would be paid using existing cash on hand and incremental debt financing to be raised prior to closing.
We ended the second quarter with a debt-to-equity ratio of 0.2x and debt-to-adjusted EBITDA of just 1.3x and feel that our strong financial position gives us the flexibility to take on additional leverage for the completion of this transaction. We also plan to assume Alliant's securitized debt facility, which had an outstanding balance of $155 million as of July 31, 2021, is rated A2 by Moody's and carries a 4.75% interest rate. The cash consideration will be finalized at the time of closing based on the actual balance of the securitization debt that is assumed on the closing date. We do not plan to issue additional equity over and above the $90 million of stock I previously mentioned. Alliant's full employee base will be joining W&D, and given Alliant's distinct business model and employee functions, we are not expecting significant cost synergies upon integration.
We do expect to achieve revenue synergies over time as we get the opportunity to sell or refinance the underlying properties in Alliant's funds. We expect the transaction to be immediately accretive to revenue, EPS, and adjusted EBITDA, even without these expected synergies. For the full year 2022, we are estimating that Alliant will contribute between $90 and $100 million in total revenues and $0.45-$0.60 in diluted earnings per share, with adjusted EBITDA of approximately $60 million. As typical of an asset management business, Alliant's revenues are primarily cash, which will benefit adjusted EBITDA going forward, adding to the strong cash fees we are already earning from our servicing portfolio and our growing debt brokerage and property sales platforms.
Our 2022 estimates take into consideration the shares issued in the transaction, as well as potential purchase accounting adjustments and assumed incremental debt costs, both of which we will be refining over the coming weeks. We expect the transaction to close sometime in the fourth quarter, subject to customary regulatory approvals and consents from Alliant's investor and lender partners. The impacts of the deal on our fourth quarter financial performance will be dependent upon the actual closing date. We plan to provide an update on the transaction status and estimated fourth quarter impacts during our third quarter earnings call. We are incredibly excited about the combination of Alliant with Walker & Dunlop and what it means for our future financial performance, and are confident that the acquisition will drive significant value to both our clients and our shareholders. Thank you for your time this morning. I'll now turn the call back over to Willy.
Thank you, Steve and Shawn. As you have heard this morning, the strategic combination of Walker & Dunlop and Alliant will not only create a market-leading affordable housing platform, but will also generate fantastic financial returns on day one. The immediate progress we achieve towards the Drive to 25 with Alliant is amazing. Revenue growth, asset management growth, debt financing growth, investment sales growth, the opportunities are almost limitless. And adding $14 billion of AUM to our asset management portfolio creates meaningful scale and grows the durable, recurring cash flow streams that Walker & Dunlop investors have come to know and love. Walker & Dunlop's role in financing communities where people live, work, shop, and play expands every day.
Growing our presence in the affordable housing industry in such a dramatic way with this acquisition is both an honor and an enormous opportunity to impact lives as we create safe, affordable housing across the country. I want to thank Shawn for agreeing to combine his fantastic company with ours and to once again welcome the entire Alliant team to Walker & Dunlop. And before I close, I must thank Greg Florkowski and Johnny Harris from W&D's business development team for the incredible time and effort they put into this transaction. They, along with many others from the W&D team and external advisors, along with Alliant's team, made this transaction happen, and I am deeply thankful for all their hard work.
Investors in W&D know that I am passionate about what I do and wildly proud of our team. This deal is truly a game changer for W&D and Alliant, and I'm thankful to everyone on the call this morning for allowing us to provide you with further information about this transformative transaction. With that, I'll ask Kelsey to open the line for questions.
The floor is now open for questions. At this time, if you have a question on your phone, please press star nine, or if you're on your computer, please click the raise hand icon at the bottom of your webcast screen. Our first question is coming from Jade Rahmani at KBW. Jade?
Thank you very much. I wanted to ask if there are any GSE approvals required as part of this, and are those going to take place over the next quarter, or did you already receive approval on that?
So we have a number of approvals we need to do, both regulatory approvals as well as partnership approvals, and Fannie and Freddie are a part of those partnership approvals.
Okay. Thanks. And there's no reason to expect that that would be an impediment considering Alliant's focus on the affordable housing space versus what W&D's legacy business is focused on.
No.
Okay. Just in terms of the relationship, do you think that the GSEs will allow financing of deals where the Alliant-managed funds are in the general partner position?
Yeah, Jade, they already do that with others, so I don't think we're treading new ground on that point.
Okay, and is that part of the investment thesis that you undertook in terms of what made the transaction so appealing, or is it really just their footprint in the affordable space, which has been something you've identified as a top priority?
As I pretty explicitly outlined, Jade, they have between 50 and 75 assets a year that come out of the lockup period, if you will, and those assets need to either be sold or refinanced or recapitalized. We view that as being a very large opportunity for us. At the same time, in our analysis and underwriting of the Alliant acquisition, none of those revenue synergies were in our analysis.
Thanks. And just lastly, how much of the cash portion of the acquisition do you think is reasonable to assume would be funded with debt issuance?
Still working through that, Jade. I think that's on the docket for the next couple of weeks, is to sort out the strategy around the debt. But I think, as I mentioned, we have pretty low leverage and relatively high and growing EBITDA relative to the amount of debt we have in place, so we have a ton of flexibility here. And we also, as you know, carried a significant amount of cash on the balance sheet at the end of June.
Okay, and do you think that the debt issuance would be unsecured, senior unsecured debt, or some other form?
Again, we're still working through that. Right now, we have a term loan B as our corporate debt, and we've had that structure in place since late 2013. I think we've had a good following in terms of the bank group that's invested in that. We've upsized it a couple of times. We've refinanced it a couple of times. We're pretty comfortable with the covenant structure in those documents, so we might lean that direction as well.
Thanks very much.
Thank you, Jade.
Thank you. Our next question is coming from Brian Violino at Wedbush Securities. Brian?
Thanks a lot, Kelsey. Thanks for taking my question. Just one quick one from us. Could you just go into how the business could be impacted by changes in either tax rates or any tax reform policies that come through?
Shawn, you want to take that one?
Yes, I'm happy to address that. Generally, to the extent tax rates increase, our business thrives. To the extent we sell tax credits and losses as part of the way we raise equity to fund these affordable housing deals, the higher the tax rate, the more valuable the losses are and the more value the tax credits are. So increasing tax credits is not a bad thing for our business.
Okay. Great. Thanks a lot.
Thanks, Brian. We have another question coming from Steve Delaney at JMP. Steve?
Yes. Good morning, everyone. I hope you can hear me. And Shawn, very nice to meet you and get to know your company.
Likewise.
I'm not sure that certainly from the research community and public stock investors really have a great handle on the low-income housing tax credit business. As you showed your rankings, it appears to be kind of embedded in much larger financial institutions. There is one standalone public company that's a Greystone affiliate called America First Multifamily Investors, and it trades under the ticker ATAX. I'm just curious, Shawn, one, if you know that company, and if so, could you compare and contrast what Alliant does vis-à-vis ATAX? Is that somebody you run into?
We do not compete with them. We know who they are. I think their business model is significantly different to ours. As far as I'm aware, they're not a tax credit syndicator. They're primarily a developer and a broker of real estate.
Right. Tax-exempt revenue bonds, I think, primarily as an investment.
Correct. Yeah. We do not compete with them.
Excellent. Well, thank you for clarifying that. Appreciate it.
Is that it, Steve? Or you got something else?
No, I'm good, Willy. Thank you.
All right. Thanks for joining us.
Okay. Thank you all. We have no further questions, so I'll turn the call back to Willy for some closing remarks.
Great. Appreciate everyone who joined us this morning. Super excited about this deal. Super excited to welcome Shawn and his team to Walker & Dunlop, and appreciate everyone's time and attention on this. And I wish everyone a very happy day, and Steve, enjoy your vacation in Europe.
Thank you, Willy. Thanks, everyone.
Thank you, everyone.