Rocket Companies completes acquisition of Redfin, offers new pricing

DETROIT/SEATTLE - Rocket Companies (NYSE:RKT), a $28.6 billion market cap company whose stock has surged over 33% in the past six months, has completed its acquisition of real estate brokerage Redfin, bringing together America’s largest mortgage lender with one of the most visited real estate websites, the company announced Tuesday. According to InvestingPro data, Rocket maintains a strong financial position with liquid assets well exceeding short-term obligations.

The combined entity introduced "Rocket Preferred Pricing," offering qualified homebuyers who use both companies’ services either a one percentage point reduction in their interest rate for the first year of their loan or a lender credit at closing of up to $6,000. The offer applies to conventional, FHA, or VA loans.

Redfin has adopted a refreshed brand identity as "Redfin Powered by Rocket" to reflect the new ownership structure.

"The reason Rocket and Redfin came together was to bridge that gap, so that the people who spend their days dreaming on Redfin.com can easily use Rocket financing to own their dream," said Redfin CEO Glenn Kelman in a statement from the press release.

Rocket Companies CEO Varun Krishna added that Redfin’s focus on building simple product experiences aligned with Rocket’s vision for homeownership.

Alongside the acquisition, Rocket Companies completed a previously announced simplification of its organizational structure. The company collapsed its "Up-C" structure, eliminated its high-vote/low-vote structure, and reduced its classes of common stock from four to two.

Morgan Stanley & Co. LLC served as financial advisor to Rocket Companies, while Goldman Sachs & Co LLC advised Redfin on the transaction.

The companies plan to launch additional products and services for homebuyers, real estate agents, and mortgage brokers in the coming months, according to the press release statement. InvestingPro analysis suggests positive momentum ahead, with net income expected to grow this year. For deeper insights into Rocket Companies’ financial health and growth prospects, investors can access the comprehensive Pro Research Report, available exclusively on InvestingPro along with 8 additional key ProTips.

In other recent news, Rocket Companies announced a $4 billion private offering of senior notes, divided equally between notes due in 2030 and 2033. This offering is aimed at qualified institutional buyers and non-U.S. investors, with proceeds intended for various financial maneuvers, including redeeming existing senior notes and repaying secured debt. The notes will be guaranteed by Rocket Mortgage, LLC, and its subsidiaries, extending to Redfin Corporation and Mr. Cooper Group Inc. upon their acquisitions. Additionally, Rocket Companies reported a board change, with Nancy Tellem opting not to seek re-election, reducing the board from nine to eight members. Meanwhile, Citron Research endorsed Rocket Companies, highlighting its strategic use of artificial intelligence and data analytics, projecting a potential enterprise value of $60 billion. In contrast, Keefe, Bruyette & Woods lowered its price target for Rocket Companies to $13, citing a more conservative outlook due to uncertain near-term operating conditions, despite positive first-quarter results. The firm remains optimistic about Rocket’s pending acquisitions, viewing them as beneficial in the long term.

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