Rocket Companies said on Monday it would acquire real estate listing platform Redfin in an all-stock deal valued at $1.75 billion, seeking to boost its lending business.
Rocket’s $12.50 per share offer equates to a near 115% premium to Redfin’s Friday close. Redfin’s shares rose about 74%, while Rocket’s fell about 12% before the bell.
Founded in 2004, Redfin operates a home search platform with more than 1 million for-sale and rental listings and a tech-powered brokerage of more than 2,200 agents.
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Rocket, whose flagship business is its mortgage-lending arm, aims to lean on technology and AI to help link prospective buyers with its financing arm and speed up deals once the transaction closes, the company said.
| Ticker | Security | Last | Change | Change % |
|---|---|---|---|---|
| RKT | ROCKET COMPANIES INC. | 13.63 | -2.13 | -13.54% |
| RDFN | REDFIN CORP. | 9.96 | +4.14 | +71.13% |
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Shareholders of Rocket will own about 95% of the combined company on a fully diluted basis, while Redfin shareholders will own the rest on deal completion expected in the second or third quarter.
Detroit-based fintech Rocket said it expects the combined company to achieve more than $200 million in run-rate synergies by 2027.
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Redfin’s CEO, Glenn Kelman, is expected to lead the business.
Morgan Stanley served as Rocket’s financial adviser, while Goldman Sachs advised Redfin.
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